How to Avoid Contractor Fraud

Six telltale signs to avoid home repair rip-off

Contractor fraud is a common problem, with complaints against general contractors ranking as one of the top ten complaints tracked by the Better Business Bureau (BBB). And if BBB complaints against general contractors are added to those involving similar home improvement trades, home repair easily surpass automobile dealers as the number-one source of consumer complaints in America today.

Finding a reputable contractor to take your place from house to home to castle may not be easy, but with some extra effort up front, you can ensure that your dream home project doesn't become a nightmare. Watch out for the following six warning signs of contractor fraud.

  1. Inaccessibility: Communication is a weak point for many home improvement pros, but keeping you posted on job progress and being available to answer your questions is the mark of a real professional. If you have to leave several messages with a contractor before getting your call returned, consider it a red flag and stay away.
  2. Avoiding Home Repair FraudUpselling: If you've asked a contractor come to your house about water damage, don't let him talk you into a deck. To avoid expensive extras and potential contractor fraud, make sure he completes the task at hand first.
  3. Hard sell: If a contractor tells you his price is good for today only, keep looking. A good deal today should be a good deal tomorrow.
  4. Door-to-door salesmen: Contractors who work neighborhoods offering to seal driveways or power wash roofs may not have your best interests in mind. Consider them uninvited pests.
  5. Panic peddlers: Panic peddling is a common home improvement scam, especially when safety is involved. Chimney sweeps, for example, are famous for advertising a low-cost chimney cleaning service to get their foot in your door. After a brief inspection, they'll invariably find a fatal flaw in your chimney requiring thousands of dollars' worth of their services to fix. If a contractor tries this one on you, ask him to leave and get a second opinion from someone without a repair to sell, like a professional home inspector.
  6. Payment policies: Contractors who call for cash up front, especially full payment, should be avoided like the plague. A small down payment is reasonable, with future payments based on progress made on your project.

Even if you have signed a contract and after reading it word for word have second thoughts, there's still hope. According to the Federal Trade Commission's Cooling Off Rule, you may still have 72 hours to cancel the contract without penalty and avoid the risk of contractor fraud.

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