Scams-A-Plenty, More than 19 Dos and Don’ts

We know of situation after situation where these kinds of scams have caused financial ruin to unsuspecting consumers. In a nutshell – do business with a local contractor whose work performance and reputation can be verified.

“Special Deal, Today Only” Beware of a contractor who says he is just passing through the neighborhood, has materials left over from another job or wants his payment up front. These kinds of “repair” artists show up in droves after storms or other disasters that have damaged homes. Contractors begin the construction, but once they have your money, may not return to complete their work. Or they may complete the job, but do substandard work. Sometimes they talk a homeowner into unnecessary repairs. Or worse, if allowed to enter the home, some will create more damage so they can repair this as well! Scam contractors may also look for jewelry, money or weapons while working in your home. By the time you realize your valuables have been stolen, the contractor may be long gone.

Established contractors should have enough business through advertising and referrals that they don’t need to go door to door to get work. If a contractor has really brought materials from another job, he is cheating his previous customer out of their purchase. Recommendations: Work only with licensed contractors. Verify the business phone and address, and check on the Internet or with your state consumer agency or attorney general’s office to see if previous customers have reported complaints. Be suspicious of a contractor who drives a truck with no company name and has out of state plates. Don’t be pressured by promises of one-day deals.

“Sign On The Dotted Line — The Home Improvement Loan Scam” Scam artists can also victimize consumers with special financing offers for home improvement repairs. In this type of scam, a contractor will offer to remodel a kitchen or fix your roof for a reasonable price. Since you haven’t budgeted for it, he tells you he can arrange financing through a lender. You then sign a bunch of papers that are blank, or that you have to rush through without reading carefully. Only later do you realize you have signed a high interest home equity loan. The contractor has already been paid by the lender and has no reason to complete the work to your satisfaction. Recommendations: To help you avoid a home equity loan scam:

1. Don’t agree to a home equity loan if you don’t have enough money to make the monthly payments.
2. Don’t sign any document you haven’t read or any document that has blank spaces to be filled in after you sign.
3. Don’t allow anyone to pressure you into signing any document.
4. Don’t ever deed your property to anyone. First consult an attorney.
5. Don’t agree to financing through your contractor without shopping around and comparing loan terms.

It is important to know when to be skeptical. Take your time.

1. Don’t let a contractor rush your decision.
2. Do research. Know how much you can afford and what you want done.
3. Contact the your state’s Department of Consumer Affairs, Attorney General’s Office or Department of Industrial Relations and the Better Business Bureau for complaint information on contractors you are considering.
4. Talk to your friends who used this contractor. Did they like his work?
5. Opt for the local, well-established contractor. Don’t assume that an ad makes the contractor reliable.
6. Compare bids and services. Be skeptical if the bid is too low. Cheaper is not necessarily better. A contractor with a low price may be inexperienced and unable to finish the work for the amount bid.
7. Get bids in writing. Does the bid reflect the improvements you discussed? How long will the project take? A detailed, written proposal allows you to shop around.
8. Is the contractor licensed, bonded and insured? Licensing requirements vary from community to community.
9. Check with your city or county building department to determine the licensing requirements for your area and if the contractor you are considering is properly licensed, bonded and insured.

Keep your savings where it belongs – in your account.

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