How to avoid a home repair scam after a disaster
After a disaster like Superstorm Sandy, so-called “storm chasers” ride to the rescue. Sadly, though, some of these contractors aren’t actually planning to help you recover from the storm. They’re planning to help themselves to your money.
Government officials and consumer advocates are advising Sandy victims to be on the lookout for scam artists who swoop into disaster areas to make a quick buck, then run off with your money without pounding a single nail.
Experts are quick to point out that most contractors are honest, hard-working and well-meaning. Meanwhile, dishonest contractors often “are incompetent and unlicensed,” the Coalition Against Insurance Fraud says.
Here are some tips to prevent becoming a victim of Sandy and a victim of home repair fraud.
- Be cautious of a contractor who knocks on your door and offers his services. “Legitimate contractors rarely seek business in this way,” the Boston Mayor’s Office says. “Even if it’s not a scam, these contractors may provide low-quality materials, second-rate work or substandard service.”
- Obtain bids from at least three contractors. Before hiring a contractor, ask for at least three references.
- Be skeptical of any contractor who encourages you to spend a lot of money on temporary repairs.
- Check out home repair contractors by reading consumer reviews Angie’s List, Yelp and the Better Business Bureau website.
- Seek recommendations for contractors from friends, relatives, neighbors, co-workers, insurance agents or claims adjusters.
- Make sure the contractor you want to hire is licensed to do business in your area and is insured.
- Find out the contractor’s address and verify it.
- Get a written contract detailing the work that will be done, the materials that will be used and the prices for labor and materials. “Accept no verbal agreements,” the Louisiana Attorney General’s Office warns. “Any changes in the contract should be in writing and initialed by both parties.”
- Never pay the entire repair bill upfront, and never pay in cash. Always pay by check or money order and keep a receipt. Write checks to the repair company, not an individual worker.
- Do not sign over rights to your home insurance claim payment. A contractor should expect to be paid a percentage when the repair contract is signed and the remainder when the work is done.
- If the contractor uncovers damage that wasn’t found during the initial visit by the insurance adjuster, contact your home insurance company to resolve the difference.
- If you think you’ve been scammed by a contractor, contact the local police department, the local prosecutor’s office, the state agency that regulates contractors or the state attorney general’s office.
Sources: AARP, Better Business Bureau, Boston Mayor’s Office, Delaware Department of Insurance, Federal Trade Commission, Louisiana Attorney General’s Office