5 home repair scams and how to avoid them

Gina Pogol | Improvement Center Columnist | September 6, 2013

The economic downturn has been exceptionally rough on the building industry, and that has created a new breed of desperate and aggressive scammers. More than ever, homeowners need to be on guard. The Property Casualty Insurers Association of America even issued a special warning:

"The issue of fraud and deceptive practices in the aftermath of a major weather event is nothing new, but a weak economy in recent years has led to an increase in aggressive, questionable solicitation practices. We know the majority of contractors are honest and aboveboard, but urge individuals who have suffered property damage to be wary. It will save them a lot of time, money and frustration when they check the credentials of the businesses and individuals they hire to repair their properties."

Know the 5 signs of a scam

If you pick an unreliable home repairer, you could be charged an exorbitant price, end up with cheap materials and shoddy work, or pay a deposit to someone who then disappears with your money. Home repair scammers range from incompetent bumblers to flat-out thieves, but many share some common traits:

    1. They have no local physical address or phone number. Their business forms are those generic things from Office Depot and there is no license number on them. Their transport has no company name on the side and their license plate may be out-of-state.
    2. They just show up. Dodgy handymen (and women) go door-to-door, looking for folks whose common sense has been rattled by the sewage smell in their carpets or the missing roof on their garages.
    3. They try to scare you by telling you that you are in danger and that they can save you if you act fast. "Your furnace is going to blow," "That chimney is about to fall down," and "You have invisible structural damage" are favorite lines.
    4. They offer a "special," that is, a one-time-only, low-ball offer because they have "leftover materials from a previous job." No written estimate or contract is provided.
    5. And here's the biggie--they want most or all of the payment upfront. In cash.

      Protect yourself from con artists

      You can get a rip-off-free restoration by following a few sensible procedures:

      • Check out any contact information you're given. It might turn out to be a mail slot at the stationery store and a disposable cell phone.
      • Find contractors with the appropriate license, and verify the information you're given. This can be done online or with a phone call to your state's contractor licensing board.
      • Check the repairer's reputation with the Better Business Bureau, consumer sites like Angie's List, or ask friends and neighbors.
      • Get several bids. Exceptionally low estimates are red flags.
      • Insist on a written contract, spelling out the work to be done, how long it will take, the materials to be used and how payment will be made.
      • Make only a reasonable down payment (generally some percentage of the materials to be used), and do it by check or credit card.

      Natural disasters can bring out the worst in some people. A few precautions can keep you from getting worked over by flood fraudsters, hurricane hoaxes and storm swindlers.

      About the Author

      Gina Pogol has been writing about mortgage and finance since 1994. In addition to a decade in mortgage lending, she has worked as a business credit systems consultant for Experian and as an accountant for Deloitte. She graduated with High Distinction from the University of Nevada with a BS in Financial Management.