How to Avoid Home Repair Scams

Home repair scams represent one of the unsavory pitfalls associated with home ownership. These types of scams can be conducted in a number of ways, but often involve full payment by the homeowner to an unlicensed contractor or one who leaves without performing any work. There are several precautions you can take to avoid home repair scams. Of major concern is checking up on any contractor you hire, making sure the contract is structured properly, and understanding your rights in case of a dispute.


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    Obtain references from your contractor. This is perhaps the most important step in establishing that a contractor is reputable. Ask for references from previous clients that will vouch for the contractor's quality of work and attitude. A fraudulent contractor will generally not have these types of references, and you should be wary of any contractor who refuses or is reluctant to provide them.
    • In addition to references, a contractor should be able to provide proof that they are licensed, bonded, and insured. Note that not all municipalities require contractors to be licensed, however.
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    Check to see how long your contractor has been in business. This information will generally be provided on the contractor's website, but you can also check outdated phone books to see if the contractor's business is listed. Anyone scamming homeowners will not be able to operate for very long in the same area and using the same name. Longevity is often a sign of sound business practices.
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    Determine if any complaints have been registered against the contractor. In many countries, watchdog organizations exist to provide consumers with protection from fraudulent practices; in the U.S., the Better Business Bureau (BBB) serves this function. If any complaints have been registered against the contractor in the past 5 years, they can be found on the BBB website.
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    Ensure that the contract is clearly written and includes all relevant information. Fraudulent contractors may intentionally word contracts in an exploitative or ambiguous manner.
    • A construction contract should always include the following pieces of information: the contractor's name, address, and phone number, estimated start and completion dates, a description of the work, the total project price, and the payment schedule.
    • The payment schedule is crucial. Avoid hiring a contractor who insists on being paid upfront or being paid in cash. Paying upfront or paying with cash makes it much harder to recoup your losses in the event of fraud.
    • Never sign a contract that you do not understand. Also avoid contracts that have blank spaces that could be filled in with type after you sign.
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    Obtain a lien waiver from the contractor. If your home repair job is big enough that your contractor will be hiring subcontractors (for instance, for electrical or plumbing work), get a lien waiver along with the contract. A lien waiver will prevent you from being responsible for paying subcontractors if the contractor does not pay them for their work.
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    Familiarize yourself with your rights regarding contract cancellation and dispute. Contract law varies between jurisdictions, and you should familiarize yourself with your local laws before hiring a contractor. For example, it is important to know how many days after signing a contract you can cancel the contract.


  • One of the most reliable ways of hiring a reputable contractor is getting a referral from a friend or relative.


  • Avoid writing a check payable to a third party, as this is a technique used by fraudulent contractors. Checks should be made out to the contractor's business.

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Categories: Home Improvements and Repairs