Wednesday, April 13, 2011

How can you detect a Contractor Scam Artist?

Seven tips to avoid scam contractors. Although most building contractors, plumbers, electricians and roofers are ethical people who perform quality work, there ARE thousands of scammers roaming the country in search of a quick buck.

Since most of us don't have degrees in engineering -- or experience in the building trades -- it's easy to get ripped off by seemingly sincere building contractors.

Every summer, folks are approached by contractor scammers three or four times. After answering a knock at the door, a young man tells Pete that he's just finished paving a neighbor's driveway, but has materials left over.

"I'll offer you a big discount if you'll let us repave your driveway, too. I just need a cash deposit, and we'll be right back."

Sound familiar?
If so, you already know about ONE classic contractor scam. However, even if this doesn't sound familiar, we'll show you 7 ways that contractor scammers try to steal your money -- and 7 ways to foil them.

Contractor Scam #1. Your roof is about to cave in!

Scare tactics are a favorite of scam artists, especially when they approach seniors.
Sometimes, they'll drop by your house and offer a "free" estimate to assess "problems" with your roof, siding, driveway, etc.

Naturally, the scammer ALWAYS finds something wrong, and then uses inferior materials to "repair" the problem while charging you a big fee.

Tip: We can't stress this enough: Always get at least two estimates for any "damage" to your home, and always consult friends, family or neighbors to learn the names of contractors they've used in the past -- ones they were satisfied with.

Contractor Scam #2. Instant Estimates.

The typical scammer will "assess" problems at your home, and offer a verbal "quote" on how much these problems will cost to fix.
Please note: verbal quotes are NOT legally binding.

If the contractor later charges twice his estimate -- or damages your property during the "repair" process -- it's doubtful you could successfully sue him.

Tip: Legitimate contractors are certified, insured and/or bonded by the state and/or town where you live. What's more: they offer WRITTEN estimates for you to inspect (and often sign) before work commences.

Contractor Scam #3. Door-to-Door Salesmen.

Like the plague, avoid door-to-door salesmen who claim they just happened to be in the neighborhood because they were doing work for someone nearby -- especially if they claim they have materials left over from the last job.

If a contractor has really brought materials from another job, he is likely cheating his previous customer out of the materials they purchased.

Tip: Honest contractors earn most of their business through referrals from satisfied customers. They don't need to travel door-to-door to find business.

Contractor Scam #4. Intentional Damage.

Let's say your area just experienced a severe storm. In the midst of the storm (during the middle of the night) the scammer might just tear a few pieces of vinyl siding from your house, and then -- miracle of miracles -- appear the next day with a sweet deal to repair that damage.

He might also suggest that if, say, additional damage occurs during the repair process, you can charge it to your insurance company.
Nobody gets hurt, right?

Tip: Wrong! Insurance companies have claims investigators who specialize in fraud. They even have lists of suspected scammers, so if you hire a suspected scammer, the investigator will REALLY be on guard. Scambuster Pete knows an investigator who's cracked more cases than Sherlock Holmes. Don't EVER commit insurance fraud.

Contractor Scam #5. Cash Only.

This scenario is easy and common: the contractor tells you he requires that you pay in cash.
Tip: NEVER agree to a cash-only deal. Let's face it: if someone asks for cash only, you almost certainly know you're NOT dealing with a reputable contractor. Chances are, you'll never see this person again after giving him your hard-earned cash.

Contractor Scam # 6. Pay Upfront.

Again, this is easy. If you pay upfront, you may never see this "contractor" again.
Tip: No reputable contractor will ask for most -- or all -- of his payment immediately. In fact, most legitimate contractors only bill AFTER the job is done to your satisfaction. If someone asks for a large upfront payment -- run!

Contractor Scam # 7. Referral Schemes.

Some scammers will offer you a substantial "discount" if you promise to refer other customers or let them show off your home as a "model" or "demonstration" project.

Tip: At best, this is a marketing gimmick. At worst, it's an outright scam, because the "discount" is usually 
not a discount at all. If you'd just shopped around, you would have discovered that a reputable contractor's "full price" was better than the scammer's so-called discount.

We realize that some readers are veteran homeowners, who know most of this stuff -- and hopefully, they haven't learned it the hard way. But we also realize that there are homebuyers who can benefit from this advice.

Either way, be cautious before hiring somebody to remodel or repair your house. Get two or three estimates and -- AGAIN -- consult with friends, family and neighbors for the names of honest and reliable contractors and tradesmen in your area.
The Federal Trade Commission (FTC) also offers tips entitled After a Disaster: Repairing Your Home.

Info provided scambusters


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