Avoid Contractor Scams
September 25th, 2009 | Published in contractor selection, remodeling, renovating
Fall is a busy time of the year for home renovations but unfortunately, it’s also high season for home contractor scams. This may come as a surprise to some because it’s not that often heard of; many people are ashamed of reporting that they’ve been duped. Often times, like with other scams it’s often that seniors are the most likely to be victimized — but anyone may fall prey to a slick grifter. And once ripped off, it’s highly unlikely to get that money back. So, how can you avoid a contractor scam? Knowing is half the battle. By knowing what clues to look for if approached with a too good to be true deal you can avoid falling prey to such scams.
When to be Suspicious
Anyone who knocks on your door and offers a ‘one day only’ deal because they happen to be in the neighborhood working on other projects is a prime example of an “opportunity” to be leery of. Keep in mind that the law in most areas require that such salespersons must be licensed with a business permit.
What to look for
A representative from a large company such as a serviceman or repairman will be in uniform with an ID badge, along with business cards that have a physical address of the company. These aren’t guarantees of trustworthiness but they certainly are more clues to legitimacy. If the offer seems legitimate and you’d like to investigate further, remember that it’s important not to feel pressured into anything until you are satisfied with obtaining all the necessary information.
What about payment?
Is there a preferred method of payment? It’s better not to pay in cash and if the demand is cash only, that’s dodgy. Using a credit card or check creates a record of the transaction – don’t forget to get receipts each time. Expect to pay 10 to 20 percent of the total job costs as a deposit after the contract is drawn up and signed. Be wary if more than that is demanded. If the project is comprised of many stages with a longer timeline, it’s likely the contractor will ask for payments to cover material costs. If so, make sure to set installments to align with completed tasks and include all of this in detail in the contract.
Get references
Any reputable contractor would be proud to show his work off. If possible, visit a current site that is being worked on. Contact the references and ask about how well they performed, how satisfied they are with the finished work and whether they would hire them again to do more work. Ask to see what they built. It’s best to hire a company that is bonded and insured and offers a warranty. Call their insurance company and ask for a copy of the policy for proof they are currently insured. Do background checks on the company such as calling the Better Business Bureau or other regulatory agencies to make sure no complaints have been lodged. When interviewing, get a least three detailed estimates of a similar scope to get a good idea of the true cost of your desired project.
Be savvy
With any business deal the old adage is true - “let the buyer beware” - but there’s no need to get paranoid. There are many reputable companies that do excellent work. By knowing what to be watch out for, first time renovators have nothing to fear when it comes to hiring the right company to build a dream house.



While more and better machines are now available to do some parts of the work, a person is still needed to run them. Some of the trades’ wages are very impressive and when you consider that the apprentices start at +/- 50% of the journeyman wage; you could be earning $15/hr to start; to sweep up, fetch materials, and learn right out of high school. Getting paid to learn is a lot easier than college or university on mom and dad!
This means that a lot of talented people are going to retire shortly and the skills they have honed over the years, will not be passed on to the younger generation.


