Five Construction Frauds & How to Avoid Them


10/5/2015 10:00 AM

Crooked contractors wanting to steal from homeowners is a common problem. They often will offer bogus repairs that are not even necessary. In some cases, no work is even done. These dishonest contractors love times after heavy rain or wind. After such disasters pass, they are happy to swoop in on unsuspecting homeowners who are desperate for quick repairs. 

While the majority of contractors out there are honest, it is usually the ones who go from door to door offering help who are untrustworthy. Good contractors have no need to solicit themselves in this manner. People who go knocking on doors usually say they walked by and happened to notice something wrong.  If there was a recent storm, they may simply show up and offer to fix something that is clearly damaged.

Homeowners could lose thousands of dollars falling for these scams. In addition to this, the ensuing headaches from trying to pay even more for real repairs or trying to recover money from a con artist complicate the situation. If a person's homeowners insurance company does not cover fraudulent repairs, compensation may never be gained. The five worst scams these crooks pull off include the following:

1. Poor Work Quality
Con artists often use very cheap materials if they do any repairs. The work is obviously low quality and repairs will have to be re-done.

2. Prepayment
With this type of scam, the contractor asks for a large sum of money upfront. After receiving the funds, the individual disappears or does very little work. This one is easy to avoid.  Never pay anything upfront to an unknown contractor.

3. Inflated Damage
In order to increase billable expenses, contractors performing this type of scam may make the holes in roofs larger or may instead just inflate the bill for work that was not done.

4. Phantom Damage
With this type of scam, the contractor says there is storm damage when there actually is none. However, the dishonest individual damages sidewalls or roofs to create damages and repairs them.

5. Deductible Payment
Some contractors offer to pay the homeowner's deductible in order to gain business. However, this is always a plot to lure people in for fraudulent work.

Fortunately, there are several ways to combat these actions. The following tips are simple and easy to remember.

How To Avoid Scams

Verify a contractor's license. Most licensed contractors are not willing to lose their reputation by doing fraudulent work. Such actions could be connected to a licensed contractor for a long time. Check with local and state licensing agencies for proper verification procedures.

Stay away from door-to-door contractors. If the contractor does seem genuine, still make sure to check references and online reviews.

Contact the Better Business Bureau. Search for the contractor on the BBB's site or call to make an inquiry. Avoid people with a sketchy history. It is also helpful to check Angie's List and Yelp.

Demand a contract. The contract should specify what work will be done. The repair schedule and price should also be included.  And importantly, do not sign a contract and leave blank spaces. 

Work with the insurance agent. Do not let a contractor talk to the insurance company alone. It is much better to work directly with an agent and adjuster who will survey the damage and decide what repairs are necessary. It is crucial to get the right repairs done by a reputable professional in order to be covered by the insurance company.

Look out for any red flags. Many con artists do not have references or business cards. Their appearance is usually poor. They may also be hesitant to provide an address. If they do provide one, it is usually a post office box instead of a street address. A respected contractor will be able to provide their License and proof that they are insured.

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