Most contractors servicing your location are legitimate and respectable. Unfortunately, there are unscrupulous individuals who try to take advantage of unsuspecting homeowners. This article will tell you how to protect yourself and what to watch out for.
Introduction
Most contractors servicing your location are legitimate. They offer fair and competitive prices for services, their quality of work at least meets government standards, they are licensed, bonded, insured and those that have been in business for more than 2 years are registered with the Better Business Bureau. Unfortunately, there are unscrupulous individuals who try to take advantage of unsuspecting homeowners. This article will feature a few symptoms that can indicate a contractor scam.
Protection Guidelines
Compare estimates, prices and the time it should take to complete the job from more than one company. Estimates should be pretty close. Avoid the company whose estimate is out of range by either being exorbitantly high or unbelievably inexpensive.
Ask friends for local recommendations of contractors they have hired before.
Be sure that the contractor is bonded, licensed and insured. Get proof in writing and then confirm with the agencies issuing the bond, license and insurance that all are active.
Insist on a written, complete contract before the job actually begins and understand the contract before signing. The contract should include the materials to be used, a payment schedule, a detailed description of the job including what is and isn’t to be done, an explanation of the guarantee about what is covered, what isn’t, and for how long, and provide you with a 3 day “Right of Rescission” which means that you have three days to cancel the contract you just signed without penalty. The contractor is responsible for obtaining all permits and this cost should be included in the estimate and contract. The down payment for a job shouldn’t exceed 20%. And, never pay in cash. Always pay with a check or money order made payable to the company not an individual.
Keep records of all contracts, correspondence, phone calls and anything else related to the job.
Out-of-state contractors can be more difficult to contact if there's a problem. Be careful hiring a contractor who doesn't have a local permanent address.
Avoid These Symptoms
Avoid the contractor whose address is a post office box. Legitimate contractors have a physical business address. Sometimes their business address is their residence when they work out of their home but it is never a post office box.
Avoid the contractor who can’t produce identification. Sometimes professionals don’t have business cards available at that very moment but their business can still be found in the phone book or at the website of the local licensing agency.
Avoid the contractor who needs an immediate decision or tries to convince you that the great offer is only good today. Legitimate contractors can have specials for a specified period of time – usually a month. They also understand that you may want to compare their offer to their competitor’s offer or consider personal finances before agreeing to a contract. Legitimate contractors don’t have a need for high pressure tactics.
Avoid the contractor who brags about having materials remaining from another job. A legitimate contractor doesn’t look for a new customer who can use leftover materials.
Avoid the verbal guarantee. Always have your agreement in writing.
Avoid the “good deal for cash.” Chances are the person is admitting they aren’t paying the appropriate taxes and can offer services for much less cost than a legitimate contractor.
If you believe you've been the victim of a contractor scam, you can file a complaint with the Federal Trade Commission in the USA or with the RCMP in Canada. And remember, “if it sounds too good to be true, it probably is.” For a basic review of what all scams have in common, read this article.