4 Tips for Avoiding Contractor Fraud

blog-avoid-contractor-fraudIn the wake of Hurricane Harvey, our Houston and Katy, TX communities will sadly see an uptick in the number of contractors attempting to take advantage of frustrated, anxious families who were displaced by the storm. Reputable contractors are often booked for weeks or months. Families overwhelmed by a natural disaster may not do their due diligence when it comes to vetting contractors, and sadly, fraudulent contractors and scam artists will step in to take advantage of this, whether it’s the use of defective materials, unkept promises, or price gouging.

blog-me_Steph_muck

Me with my friend and photographer Stephanie Cheney, mucking out her Katy, TX house after it flooded during Hurricane Harvey.

The disaster relief non-profit organization SBP has identified recommendations to safeguard families from contractor theft. They also offer a free contractor fraud checklist online. We’ve summarized their suggestions here:

  1. Get for recommendations from neighbors, family, friends, or co-workers who’ve had similar work done. Avoid using contractors who “just happen to be in the neighborhood” knocking on doors or “have material leftover from another job,” as these are often red flags for fraudulent activity.
  2. Ask for references and CHECK references. Call former clients. Check their Better Business Bureau rating for any complaints. Honest contractors will have a verifiable track record. Also make sure to use contractors who are licensed and bonded or insured. We highly recommend using SBP’s Free Contractor Checklist as a guide when interviewing contractors.
  3. Get more than one estimate and get it in writing. Verbal estimates don’t hold up in court if the contractor ends up charging your double or damages part of your home. It’s also a good idea to have a knowledgable friend or an attorney review the document. Both you and the contractor should sign the estimate prior to beginning any work.
  4. Avoid paying cash upfront. According to SBP, “Document all payments, via check or credit card, so there is a paper trail. Clients who pay with cash are likely to never see the contractor again. Reputable contractors ask for down payments or deposits (1/3 of the total price is standard procedure), almost never request full payment upfront. In fact, most legitimate contractors bill at predetermined progress points in the project and when the work is complete to the client’s satisfaction. If a contractor asks for or demands total payment upfront, do not use that contractor.”

If you suspect a repair rip-off, call the consumer division of your state Attorney General (800-351-4889). If you suspect fraud, waste, or abuse involving Federal Emergency Management Agency disaster assistance programs, report it to FEMA’s Inspector General’s Office (800-323-8603).

As home stagers, we’ve heard too many tragic tales from frustrated homeowners who were taken advantage of by unscrupulous contractors. Disaster-struck communities are a magnet for this type of theft. Taking the necessary precautions to hire a reputable homebuilder will ultimately help you get back into your home faster. And if Three Bears Home Staging can help, don’t hesitate to contact us at (832) 377-0785.

Title photo credit:  “N view” by Sean Gillies is licensed under CC BY 2.0

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