Jon Hancock
The Federal Trade Commission (FTC) has received 109,000 reports of home remodeling scams since 2007. During that time, the victims have lost nearly $207 million.
However, given that many scam victims choose not to disclose the crime, that might only be the tip of the iceberg.
Regretfully, con artists frequently target elderly homeowners, believing them to be more affluent and susceptible to memory or cognitive issues.
The dark side of home improvement
Keep in mind, there are home improvement businesses everywhere and at all quality levels. Some have a solid reputation and produce satisfactory work.
Other contractors are questionable and just want to get rich quick; their caliber of workmanship is, let’s say, lacking.
Then there are the real con artists who take advantage of you and your house, leaving you with nothing but false promises. Their sole intention is to defraud you of your money and leave you with nothing.
Trust but verify
How can you tell if a contractor might not be reputable? According to the FTC, these behaviors are red flags:
• Scammers knock on doors, claiming to be “in the area” looking for business.
• Scammers claim they have materials left over from a previous job, which will save you money.
• They pressure you into an immediate decision.
• They ask you to pay for everything upfront and/or they only accept cash.
• They ask you to get the required building permits.
• Scammers suggest you borrow money from a lender they know.
• They won’t sign a contract, but insist on a handshake deal.
These seem almost obvious, but con artists don’t become con artists without learning the art of persuasion. They put you at ease. They engender trust and your guard comes down.
Be alert. If something doesn’t feel right, you are under no obligation to move forward. Call a trusted friend or advisor to discuss your thoughts.
How to avoid scammers
Here are some ways you can greatly reduce your odds of being victimized.
• Consider only contractors who are licensed and insured.
• Get recommendations from family and friends.
• Check with the local Home Builders Association and consumer protection officials to see if they have complaints against a contractor.
• Research a business online and read reviews but keep in mind that they may not be perfect. Instead, focus on the center of gravity, i.e., the bulk of reviews, and how complaints are handled.
• Get written estimates and read the contract carefully.
• Don’t pay the full amount up front. A down payment will likely be required, but avoid those who want full payment upfront.
Let me remind you once more to remain vigilant and remember – you are not obligated to proceed if something doesn’t feel right.
In the unfortunate event that you have fallen victim to a scam, report the crime to the National Association of Homebuilders, the BBB, your state’s attorney general’s office, and the state consumer protection office.
A lot of home renovation businesses take great pride in their work. By adopting a few basic safety measures and researching the reputation of the business you are considering hiring, you can significantly lower your risk of becoming a victim of fraud.
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