Home Improvement Fraud
Each year when the weather turns nice, itinerant crews of roofers, pavers seal coaters, tree trimmers and day laborers travel from city to city, driving through neighborhoods and mobile home parks looking for victims -- mostly the elderly. Sometimes they offer to pave your driveway, repair your roof, or paint your house with supplies left over from another job.
This is just a scam. The repair work is completed very quickly, the quality is poor and the "repairs usually cost more than the original estimate.
A BUNCO artist working a home improvement scheme usually drives a commercial van or pickup truck through a residential area. Stopping to talk to a person working in a yard the BUNCO artist offers to spray the roof, coat the driveway or fertilize the lawn with materials left over from another job. Because the price quoted is low, the person does not ask for a written estimate.
After the work is done, the BUNCO operator asks to be paid a higher amount than the quoted price. The person is told materials used are stolen, and the BUNCO artist threatens to call the police or uses sheer intimidation if the higher price is not paid. To make matters worse, the materials used are often inferior. The roof coating might be whitewash, the driveway coating, motor oil, and the fertilizer made of sawdust and oil.
Before home repairs are made, deal with and compare estimates from several reputable companies. Verify identification of persons offering to make low priced repairs. If you are suspicious of the repair person, call local law enforcement immediately and give descriptions of the person and vehicle.
Related to Construction Fraud and Home Repair Fraud.
WARNING SIGNS
Generally, work that "adds to or subtracts from real estate" requires a registered contractor. Businesses that provide services such as gutter cleaning, pruning, lawn care or window washing generally do not need to be registered. If you are planning to hire a contractor, make sure the contractor is registered, bonded, and insured. Check the contractor's references. Solicit several written bids.
This is just a scam. The repair work is completed very quickly, the quality is poor and the "repairs usually cost more than the original estimate.
A BUNCO artist working a home improvement scheme usually drives a commercial van or pickup truck through a residential area. Stopping to talk to a person working in a yard the BUNCO artist offers to spray the roof, coat the driveway or fertilize the lawn with materials left over from another job. Because the price quoted is low, the person does not ask for a written estimate.
After the work is done, the BUNCO operator asks to be paid a higher amount than the quoted price. The person is told materials used are stolen, and the BUNCO artist threatens to call the police or uses sheer intimidation if the higher price is not paid. To make matters worse, the materials used are often inferior. The roof coating might be whitewash, the driveway coating, motor oil, and the fertilizer made of sawdust and oil.
Before home repairs are made, deal with and compare estimates from several reputable companies. Verify identification of persons offering to make low priced repairs. If you are suspicious of the repair person, call local law enforcement immediately and give descriptions of the person and vehicle.
Related to Construction Fraud and Home Repair Fraud.
WARNING SIGNS
- The repairperson drives an unmarked truck or van with an out-of-state license.
- The worker has no business identification, local address or telephone number.
- You are offered a "special price" if you sign today.
- The worker wants upfront cost or fees, or accepts only cash.
- No written estimates or contracts are provided.
- The worker does not have any references.
- The offer sounds "too good to be true"
- The vehicles have out of state license plates
- The worker cannot provide any contractor's license, permits, insurance, or bonding information.
Generally, work that "adds to or subtracts from real estate" requires a registered contractor. Businesses that provide services such as gutter cleaning, pruning, lawn care or window washing generally do not need to be registered. If you are planning to hire a contractor, make sure the contractor is registered, bonded, and insured. Check the contractor's references. Solicit several written bids.
Use caution
Use caution when hiring a home improvement contractor. Scams abound, especially following a major storm, flood, or other weather event when many homeowners are trying to repair their houses. But contractor scams can happen any time, so be wary of high-pressure sales tactics, up front fees, and fly-by-night businesses. Con artists will take homeowners’ money and deliver slipshod work… or no work at all.
This, from the BBB explains it all.
Use caution when hiring a home improvement contractor. Scams abound, especially following a major storm, flood, or other weather event when many homeowners are trying to repair their houses. But contractor scams can happen any time, so be wary of high-pressure sales tactics, up front fees, and fly-by-night businesses. Con artists will take homeowners’ money and deliver slipshod work… or no work at all.
This, from the BBB explains it all.
How to Avoid a Home Improvement Scam
Adding a room, renovating a basement, or doing some much-needed repairs around your home can be a big undertaking. Finding a trustworthy contractor is an important first step. Scammers will promise to do the work, but leave you and your home worse off than when you started. They may do shoddy work, damage your home, overcharge you, or just take your money without performing any services. So how do you tell the difference between a trustworthy contractor and a scammer? Before you hire a contractor, learn how to recognize the signs of a home improvement scam.
Signs of a Home Improvement Scam. How can you tell if a contractor might not be reputable? Here are some tactics scammers use:
How to Avoid a Home Improvement Scam. Here are some tips to help protect yourself and your money:
The Home Improvement Loan Scam. Sometimes, contractors will not just scam you through the work they do — or don’t do. Sometimes, they’ll actually set up a scam that ends with a loan against your home.
Here’s how it works: a contractor calls or comes to your door. He offers a deal to install a new roof or remodel your kitchen. He says he can arrange financing through a lender he knows. After he starts work, he asks you to sign papers. They may be blank — or he might hustle you along and not give you time to read through them. Later, you find out you’ve agreed to a home equity loan with a high interest rate, points, and fees. What’s worse, the work on your home isn’t done right or isn’t completed, and the contractor — who may already have been paid by the lender — has stopped returning your calls.
To avoid a loan scam
Report a Problem. If you have a problem with a home improvement project
If you can’t resolve it with the contractor, consider getting outside help from
For More Information
Source: https://www.consumer.ftc.gov/articles/how-avoid-home-improvement-scam
- Signs of a Home Improvement Scam
- How to Avoid a Home Improvement Scam
- The Home Improvement Loan Scam
- Report a Problem
- For More Information
Signs of a Home Improvement Scam. How can you tell if a contractor might not be reputable? Here are some tactics scammers use:
- Scammers knock on your door looking for business because they are “in the area.”
- Scammers say they have materials left over from a previous job.
- Scammers pressure you for an immediate decision.
- Scammers ask you to pay for everything up front or only accept cash.
- Scammers ask you to get any required building permits.
- Scammers suggest you borrow money from a lender they know.
How to Avoid a Home Improvement Scam. Here are some tips to help protect yourself and your money:
- Consider only contractors who are licensed and insured. Check with your state or county government to confirm their license and ask the contractor for proof of insurance.
- Get contractor recommendations from people you know and trust.
- Check with the local Home Builders Association and consumer protection officials to see if they have complaints against a contractor. You also can search online for the company’s name with words like “scam,” “review,” or “complaint.” Or use online rating websites you trust to see what others are saying about the contractor.
- Get multiple estimates. A written estimate should include a description of the work to be done, materials, completion date, and the price. Don’t automatically choose the lowest bidder. And ask for an explanation if there’s a big difference among the estimates.
- Read the contract carefully. Contract requirements vary by state. Even if your state doesn’t require a written agreement, ask for one. Before you sign a contract, make sure it includes
- the contractor’s name, address, phone, and license number
- an estimated start and completion date
- any promises made during conversations or calls related to issues such as the scope of work and the cost of labor and materials
- a written statement of your right to cancel the contract within three business days, if you signed it in your home or at a location other than the seller’s permanent place of business
- Don’t pay the full amount for the project up front. Some states actually limit the amount of money a contractor can ask for as a down payment. Contact your state or local consumer agency to find out the law in your area. And never make the final payment until the work is done and you’re satisfied with it.
The Home Improvement Loan Scam. Sometimes, contractors will not just scam you through the work they do — or don’t do. Sometimes, they’ll actually set up a scam that ends with a loan against your home.
Here’s how it works: a contractor calls or comes to your door. He offers a deal to install a new roof or remodel your kitchen. He says he can arrange financing through a lender he knows. After he starts work, he asks you to sign papers. They may be blank — or he might hustle you along and not give you time to read through them. Later, you find out you’ve agreed to a home equity loan with a high interest rate, points, and fees. What’s worse, the work on your home isn’t done right or isn’t completed, and the contractor — who may already have been paid by the lender — has stopped returning your calls.
To avoid a loan scam
- Never agree to financing through your contractor without shopping around and comparing loan terms.
- Never agree to any loan without understanding the terms of the loan and knowing whether you can make the payments.
- Don’t sign a document you haven’t read, or that has blank spaces.
- Don’t let anyone pressure you into signing any document.
- Never transfer your deed to anyone without consulting an attorney, a knowledgeable family member, or someone else you trust.
Report a Problem. If you have a problem with a home improvement project
- First try to resolve it with the contractor. Many disputes can be resolved at this level.
- Follow any phone conversations with a letter you send by certified mail. Request a return receipt, so you can prove that the company got your letter.
- Keep notes and copies of letters and documents for your files.
If you can’t resolve it with the contractor, consider getting outside help from
- your state attorney general or local consumer protection office
- your local home builders association
- your local media’s Call For Action lines
- dispute resolution programs
For More Information
- Visit consumer.ftc.gov/homes
Source: https://www.consumer.ftc.gov/articles/how-avoid-home-improvement-scam