Introduction
Contractor scams are alarmingly effective, exploiting homeowners’ need for services and good deals. Even the savviest among us can fall victim to these tricks. Here are six common scams and tips on how to avoid them.
1. Driveway Destruction
- The Scam: A contractor offers a great quote to repave your driveway. They start work, demolish the existing driveway, and then double the original cost, leaving you with no choice but to pay up or find another contractor.
- Why It’s Easy to Fall For: The scam is brazen and unexpected. Once your driveway is ruined, you’re stuck between a rock and a hard place.
2. Leftover Materials
- The Scam: A contractor claims to have leftover materials from a nearby job and offers a discount if you let them use these materials on your project. After taking a deposit, they either disappear or do shoddy work.
- Why It’s Easy to Fall For: It sounds reasonable and appeals to your desire to save money. The friendly approach also makes you feel comfortable.
3. The Urgent Deal
- The Scam: A contractor offers a fantastic deal but insists you must sign a contract and pay a deposit immediately. Once you do, they vanish.
- Why It’s Easy to Fall For: Time pressure is a common tactic used by scammers to trigger impulsive decisions.
4. Insurance Fraud
- The Scam: A contractor offers to handle an insurance claim for a project you can’t afford. They either commit fraud by inventing a covered event or take the insurance payout and disappear without doing the work.
- Why It’s Easy to Fall For: The contractor poses as a helpful friend, and it’s not uncommon for legitimate contractors to handle insurance claims.
5. The Friendly Lender
- The Scam: After giving a shocking quote, the contractor suggests a friendly lender who offers financing at a great rate. The contract you sign is actually a home equity loan, and the contractor disappears with the money.
- Why It’s Easy to Fall For: Financing for home improvements is common, and the convenience can lead to lapses in due diligence.
6. Free Inspection
- The Scam: A contractor offers a free inspection and “finds” an urgent problem. They may even cause damage to create an emergency. After taking a deposit, they leave to get materials and never return.
- Why It’s Easy to Fall For: The offer of a free inspection seems risk-free, and the pressure of an urgent problem can cloud your judgment.
How to Protect Yourself
- Research Thoroughly: Always check a contractor’s credentials, licenses, insurance, and references.
- Avoid Immediate Commitments: Don’t sign contracts or pay deposits under pressure.
- Monitor Deposits: Be wary of large deposits. Typically, a deposit of 10-33% is reasonable, but check local regulations.
By being vigilant and taking these precautions, you can protect yourself from falling victim to these common contractor scams.
