How to avoid common contractor scams

Sunday, February 17th, 2013 By

A contractor at work on an interior wall.

Not all contractors are honest. Protect yourself. (Photo Credit: Public Domain/U.S. Army/Flickr)

If you’re going to hire a home remodeling contractor, it’s important for you and your money that you hire someone trustworthy. Here are some tips to help you avoid some of the more common contractor scams.

Ask for four references

While it is not uncommon for private contractors to show up for a client meeting with three references, it’s worth it to ask them for one more. Ideally, you want the extra reference to be someone who actually had to call the contractor back to have them fix a problem with their work. This is a great way to discover how firmly the contractor stands behind his work.

Bring a backup to the meeting

While most contractors are honest, it pays to be safe. If you live alone, have a friend on the premises when you meet with the contractor so that it appears that someone else live there. After the friend leaves, check that the doors and windows are locked.

Look the contractor up with the Better Business Bureau

While it may be common sense to check a contractor’s record with your local chapter of the Better Business Bureau, not everyone goes the extra mile. Check them out with BBBs in surrounding states, particularly if you seek home remodeling following a natural disaster.

Verify license and bonded status

Contractor’s license, operating permits and bonds (surety, performance, workers’ comp) must be verified before hiring any contractor. FEMA disaster inspect Lanard Cullins told Bankrate that consumers should verify a contractor’s documents through the secretary of state’s office in any state in which they’re licensed. Checking with local authorities to ensure they have complied with the law is also advisable.

If you’re unsure of what to look for in terms of contractor bond, consult with an insurance agent who specializes in home remodeling, advises Phae Howard of the National Center for the Prevention of Home Improvement Fraud.

Checking up on insurance

Speaking of insurance, one thing a consumer should know for certain before hiring a contractor is whether the contractor’s insurance is in effect. Stolen equipment is a fact of life, and you want your contractor to be prepared.

Another important note regarding insurance involves contractors asking you for your insurer’s contact info, then contacting them for you. This is an absolute scam, says Cullins. Never give personal insurance info or proceeds to any contractor.

The contractor should buy supplies

Hitting you up piecemeal for supplies (or supply money) at regular intervals is a sign that your contractor is unprofessional. If you must buy, never give the contractor your money. Meet them at the supply store, buy what’s needed yourself and make sure the materials will be delivered to the site the day they’re needed.

Hire an inspector

Have your local building code inspector or an independent inspector check your project once the contractor has pulled the permits. Using an inspector before and after a project is also a good safeguard.

Play it safe with contracts

Don’t sign a contract with a contractor unless you’re sure the details are correct, including start and end dates for the project. Have an attorney review the contract before you sign it if anything is unclear.

Sources

Bankrate

BBB

NCPHIF

Beware A/C scams

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