Fraudulent behavior is on the rise so it’s no surprise when you read about (or experience) identity theft, online scams, or computer hacking. But what about contractor fraud? If you are a homeowner, there are times that you need something repaired or replaced, but how do you know who to trust? Unfortunately, scammers are everywhere so you need to be aware of what contractor fraud looks like and how to stay safe.
What is Contractor Fraud?
Contractor fraud refers to illegal business practices (scams) committed by fake contractors trying to get work or exaggerating/inventing work to scam people out of money. There are many different types of contractor fraud, but the two most common types of which to be aware include:
Exaggeration of/Invents Damages- This is a very common type of scam where the contractor shows up and tricks the homeowner into thinking there is damage when there really isn’t or exaggerates damages to get money. For example, a contractor shows up at your house and says he is doing roofing work in your neighborhood and wants to inspect your roof. According to him, he notices some loose shingles. Now this is where you need to be careful. Once he gets on your roof, you have no idea what he is doing or sees. Roofing scammers will either create some damage and then charge you to repair it or exaggerate damages and charge extra.
Falsifying Work/Overpricing- This is another common type of contractor fraud. This typically happens when someone is called in to do work and the contractor falsifies the work being done and overcharges you, the homeowner. For example, let’s say you have a significant leak that needs to be addressed immediately before it gets worse and creates a bigger issue. You find a plumber that can come right away. Some contractors prey on vulnerable homeowners who are in an emergency situation and need work done immediately. They see this as a way to scam you, the homeowner, by doing work they may not even need to do at a much higher price that is considered reasonable.
Fraudulent contractors target those who are elderly, need immediate service, and/or have just experienced a huge loss. You need to know what to do to keep yourself safe from this type of dishonest behavior.
Helpful Tips to Avoid Contractor Fraud
Being taken advantage of and experiencing a fraudulent loss may seem frightening, but there are measures you can take to reduce the likelihood of being scammed. Below are some tips to help you avoid being scammed.
- Any contractor who shows up unsolicited to your door should be red flagged.
- If you need home repairs, get more than one estimate from reputable contractors. Always ask to see their official contractor’s license.
- Take note of the contractor’s license plate and request to see his/her driver’s license. Be wary of any contractor with out of state plates as this could be a sign he/she is looking for scam opportunities. If you have concerns, go to the National Insurance Crime Bureau an do a VINCheck Lookup to search the license plate.
- Get everything in writing.
- Be wary of any contractor who pressures you to hire him/her.
- Never pay any money to a contractor until the job is done and is acceptable. If a contractor asks for money up front, you may never see him/her again.
- Never sign a contract with blanks as they person can add terms/language to which you did not agree.
- Always communicate with your local N.Y. independent insurance agent about any losses/damages to your home. Once the claim has been reported, the insurance company can inspect the damages and assign a contractor who is reputable to perform the work.
In order to avoid contractor fraud, you must understand what it looks like and then take preemptive measures to identify and avoid potentially fraudulent contractors in order to stay safe and protect yourself. If you have any questions or concerns regarding possible contractor fraud, contact Burkett & Associates at 256-704-7400 and we will help. We are here for all your Alabama insurance needs.