Home repair fraud: Beware the unsolicited contractor

Stephanie Taylor Christensen

If you get a visit from a repairman or contractor you didn't call, beware. As well-intentioned as this person may appear, uninvited vendors showing up at your door is a common sign of home repair fraud.

Home repair fraudsters often will claim to have been sent by your insurance company to inspect your roof or to check for sinkhole damage or some other structural issue, according to the National Insurance Crime Bureau. They might even promise that the work they do will be covered by your home insurance policy.

Another common scheme is to play on your emotions, with fraudsters stating expertise in a certain area of home maintenance and telling you they've noticed a problem with your property must be addressed immediately. Either way, the National Insurance Crime Bureau recommends turning away any vendor who was not called by you or your home insurance company.

If you allow a fraudulent repairman into your home and give him your insurance information, he'll hit your home insurance company with sky-high claims -- and if the services he performed aren't covered by your policy, you'll be left paying for them. Even worse, the work that home repair scammers do is often subpar.

Home repair fraud most commonly victimizes senior citizens, first-time homebuyers, women and those who aren't native English speakers, according to the National Center for the Prevention of Home Improvement Fraud. Homeowners in areas that have just been hit by natural disasters also are popular targets for home repair fraudsters. Such targets are especially vulnerable because they're feeling stressed, they lack knowledge about repairs or they simply aren't aware of repair fraud.

Before beginning any home repair project, obtain at least two bids in writing, the Federal Trade Commission FTC) recommends. The FTC also suggests the following guidelines when dealing with home repair contractors:

  • Ask for proof of the contractor's business license. Jot down the license number.
  • Assume that any offers made on a "now or never" basis are fraudulent.
  • If your insurance company has issued a check to you for repairs after a disaster, never sign it directly over to a contractor. Instead, arrange for a "certificate of completion" with your bank before issuing payment. The bank then will pay the contractor for each stage of the job after you've approved it.
  • Never pay contractors in full before or just as a job begins, regardless of how persistent they are. Pay either in installments as you continually inspect and approve the quality of work, or in one lump sum at the end.
  • Particularly for large home repair jobs, require that all contractors provide a sworn statement that materials have been fully paid for and that all subcontractors have been paid, to protect yourself from potential recourse if money still is owed on work done to your property.

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