construction scamsWe’d like to think that we can trust the business people we interact with, but these days, you can’t even trust a nice smile and a business suit. In fact, those are the main culprits for running scams on innocent consumers. Homeowners who are planning to make renovations or even build a brand new home oftentimes fall victim to smooth-talking contractors with bright smiles.

The good news is that we now live in a viral world, where we can easily share information about these toothy sharks. You can also find tips to avoid hiring a contractor who is going to give you a botched job or worse, steal your money without even showing up to complete the work. Let’s take a look at some of the tips for dodging construction scams that homeowners are plagued with across the country.

constructon scam door-to-door

Close the Door on Door-to-Door Solicitors

No established contractor is going to go door-to-door looking for work. His business flows to him through his professional ads and word-of-mouth referrals. When a contractor is good, he doesn’t have to seek out work. The door-to-door solicitors are more likely than not travelers who go from state to state pretending to be honorable contractors looking to help homeowners. These solicitors usually request upfront cash or a check, but of course, they never come back to start the remodeling project. You may find these sharks running the following scams:

• Posing as a roofer, doing a botched job – simply sliding a few shingles over the older ones and spraying the roof with an oil to make it look like new.
• Offering to reseal your driveway, fence or roof, and instead use a fake water liquid oil instead of the real deal.
• Using a decoy to distract the homeowner, so that the other culprit can slip inside to steal valuable items from the home.
• Claims he will use leftover materials from another job, so that you can save money.
• Showing up to perform the work, but does sub-par work, like putting together something that ends up breaking.
Here are a couple of red flags to watch out for when dealing with potential slicksters:
• He is driving an unmarked truck and/or has out-of-state license plate.
• There is a PO Box as his address and/or an 800 phone number.
• He is fast-talking, seems friendly, but uses scare tactics to pressure you, such as saying that this is a one-time deal, so that you will act quicker.
• He asks if he can use your home as a display home in exchange for a discount.
• He says he’ll give you a discount if you find more customers in your locale.
• He won’t give you a written estimate or a contract and prefers to use a verbal agreement.
• He offers a ridiculously low estimate, which may be tempting until you find out that the workers are sub-par and the materials are total junk.

construction scamDisaster Victims: Don’t Become a Victim of a Construction Scam

You’re going through a devastating time after a horrible disaster and some guy comes up to you and offers you a deal of a lifetime to repair your home. Only to your own financial peril, you find out that he was nothing but a scum feeding off the woes of victims who have already been stricken by tragedy.

They like to prey on homeowners who have had their homes partly or completely destroyed by catastrophes like wildfires, hurricanes and floods. The key here is to get these insured homeowners to dish out their insurance money to them, without having to actually lift a finger to do any construction work.

In this case, before hiring a contractor, it’s best to contact your insurance agent to find out what will be covered, and then retrieve the contractor’s license number and do a complaint history check to be sure that he doesn’t have a bad reputation.

Some of the warning signs of a contractor who is trying to take advantage of a disaster victim include:

• Flyers and business cards offering repair work. Legitimate contractors wouldn’t send this until after initial contact from the potential client.
• He offers to begin repair work right away and will take whatever you get from your settlement, even before you file a claim with your insurer.
• He asks for full payment or large deposit upfront before starting any repair work.
• He asks for cash payment in order to buy materials – always do transactions using check or credit card, so that there is a paper or electronic trail.

Hang Up on Telemarketers Making Unsolicited Free Inspection Offers

It’s common to get unsolicited phone calls from telemarketers from reputable organizations, but if you get a phone call from someone offering a free inspection, then alarm bells should start ringing. In reality, businesses don’t offer their services for free for one simple reason – they wouldn’t survive. Here are some of the scams that are commonly run by unsolicited inspectors:

• He says he wants to do an inspection for estimating repairs needed and ends up giving you a bill for the inspection or saying that you have to get repair work done, when you actually don’t.
• Someone poses as an inspector, but is really casing your home, so that he can burglarize it in the future.
• He offers to inspect your furnace, electrical, pest damage, air leakage or test for radon or lead in your paint or water.
• Says that he will be in your area and will be doing inspections of other homes in your community.
Red flags to look out for to avoid these scams:
• No phone number shows up on your caller ID (by law, telemarketers are required to have their phone number displayed).
• You ask questions about the company, but the caller won’t answer them and won’t provide written materials from the company about their business.
• They ask for your credit card or bank account information.
• The caller asks for advance payment for home repairs.
• Offers are being made that are too good to be true.
• The caller won’t provide a license number, local address or telephone number.

There are all types of construction scams out there today, with many new ones popping up all the time. Make sure to stay alert and always check credentials and background of a contractor before hiring one.