FRAUD RESOURCE CENTER
En español | If you are a homeowner, it’s not uncommon to have contractors show up on your doorstep uninvited. They say they happened to be doing some work in the neighborhood and noticed that your house needs some repairs, too. They offer to fix your roof, repave your driveway, or perform other repairs or renovations, for what sounds like a great price.
When that happens, be wary: The smiling fix-it man or woman at your door might turn out to be an unscrupulous contractor or an outright con artist, out to fleece you with a home improvement scam.
Home improvement scammers will often ask for payment up front. Some simply disappear with your money. Others will do shoddy work, or claim to have discovered some hidden problem in your house that needs immediate attention and significantly raises the cost (a dishonest variation of the sales tactic known as upselling).
Crooked contractors look to prey on people they view as vulnerable. If your house has been damaged by a storm or natural disaster, for example, a scammer might show up and promise fast, cheap repairs, or try to persuade you to sign over a payment from your insurance company.
Some seek out older homeowners, perceiving them to be more trusting, more likely to have a sizable nest egg, and more prone to have memory or cognitive problems that can exploited, according to the Eldercare Locator, a federal clearinghouse for information on aging services.
One alleged fraudster arrested in April 2020 in Bayonne, New Jersey, was charged with coercing $200,000 from a 65-year-old homeowner, escalating what started as a leak repair into a series of unnecessary jobs over the course of three months. The suspect had a history of arrests for similar scams in other cities, Bayonne police said. Here's what you can do to avoid being victimized by a home repair con.
- Be wary of contractors who:
- say they stopped by because they just happened to be in the neighborhood. The good ones are usually too busy to roam around in search of work.
- say they can offer a lower price by using surplus material. That could mean they overbilled a previous customer or didn’t finish the work.
- make limited-time offers, pressuring you to hire them right away to get a discount.
- demand upfront payment, or offer to arrange financing through a lender they know.
How to protect yourself from this scam
- Do insist on seeing references. The Federal Trade Commission (FTC) recommends asking past customers detailed questions, including whether the project was completed on time and if there were unexpected costs. The FTC also suggests asking the contractor if you can visit a job currently in progress.
- Do require a bid in writing, and compare bids from multiple contractors before agreeing to any work.
- Do check the Better Business Bureau (BBB) website to see contractors’ ratings and whether any complaints have been filed against them.
- Do get a written contract before you pay any money and before the work starts.
- Do read the fine print. The BBB says a contract should include a detailed description of the work, material costs, start and completion dates, and warranty information.
- Do verify before making the final payment that the work has been done to your satisfaction, subcontractors or suppliers have been paid, and the job site has been cleaned up.
- Do file a complaint with the BBB if you've been scammed or poorly served by a contractor.
- Don’t pay cash. The FTC recommends using a check or credit card, or arranging financing.
- Don’t put down a big deposit. The initial payment should be no more than a third of the total estimate, payable on the day the materials arrive.
- Don’t automatically take the lowest bid. Some contractors cut corners to come in lower than competitors, according to the BBB. The FTC recommends that if one contractor’s estimate is significantly less than those of competitors, ask why.
- Don’t let the contractor arrange financing for you. Scammers may try to talk you into taking out a home-equity loan or reverse mortgage to pay for repairs and arrange for the lender to pay them directly, giving them little incentive to finish the job or do it properly.
- Don't agree to get any required building permits yourself. That should be the contractor's responsibility.
- Contact your state consumer-protection agency to report home improvement fraud.
- Check with your state's licensing agency to see if a contractor you are considering hiring is licensed.
- The National Association of the Remodeling Industry has an online directory of its members, who have pledged to follow the organization’s ethical guidelines.
- The Eldercare Locator and the National Association of Area Agencies on Aging produced a detailed brochure on home improvement scams with tips geared for older adults.
Updated October 29, 2020