How To Avoid the Most Common Home Improvement Scams: Internet ScamBusters #257
Today's issue focuses on home improvement scams. We'll advise you on the most popular home improvement scams, and offer lots of tips to help you protect yourself from unscrupulous contractors.
And now for the main feature...
What Everyone Ought to Know About... Home Improvement Scams
There are so many different home improvement scams that it was hard to decide which ones to write about. Many homeowners are very vulnerable because they don't know much -- or anything! -- about home repair or home improvements.
And the trouble is that scam artists take advantage of what you don't know.
Complaints against home improvement contractors are one of the most common complaints consumer organizations and federal consumer agencies receive. With over $200 billion spent in America each year, home repairs and improvement make an attractive target for scam artists.
Here are a few of the most common home improvement scams:
1. Special Deal, Today Only
Beware of a contractor who says he is just passing through the neighborhood, has materials left over from another job or wants his payment up front. These kinds of "repair" artists show up in droves after storms or other disasters that have damaged homes.
Contractors begin the construction, but once they have your money, may not return to complete their work. Or they may complete the job, but do substandard work.
Sometimes they talk a homeowner into unnecessary repairs. Or worse, if allowed to enter the home, some will create more damage so they can repair this as well!
Scam contractors may also look for jewelry, money or weapons while working in your home. By the time you realize your valuables have been stolen, the contractor may be long gone.
Established contractors should have enough business through advertising and referrals that they don't need to go door to door to get work.
If a contractor has really brought materials from another job, he is cheating his previous customer out of their purchase.
Recommendations: Work only with licensed contractors. Verify the business phone and address, and check on the Internet or with your state consumer agency or attorney general's office to see if previous customers have reported complaints.
Be suspicious of a contractor who drives a truck with no company name and has out of state plates. Don't be pressured by promises of one-day deals.
2. Sign On The Dotted Line -- The Home Improvement Loan Scam
Scam artists can also victimize consumers with special financing offers for home improvement repairs.
In this type of scam, a contractor will offer to remodel a kitchen or fix your roof for a reasonable price. Since you haven't budgeted for it, he tells you he can arrange financing through a lender.
You then sign a bunch of papers that are blank, or that you have to rush through without reading carefully.
Only later do you realize you have signed a high interest home equity loan. The contractor has already been paid by the lender and has no reason to complete the work to your satisfaction.
Recommendations: The Federal Trade Commission offers advice to help you avoid the home equity loan scam:
- Don't agree to a home equity loan if you don't have enough money to make the monthly payments.
- Don't sign any document you haven't read or any document that has blank spaces to be filled in after you sign.
- Don't allow anyone to pressure you into signing any document.
- Don't ever deed your property to anyone. First consult an attorney.
- Don't agree to financing through your contractor without shopping around and comparing loan terms.
3. Cheap-Work Home Improvement Scams
As we mentioned, some scam artists will do the work they are contracted for, but the result is a shoddy product.
Here are some of the most common schemes used by contractors looking to make a quick buck:
Driveway Sealant -- The scam artist offers to seal your driveway at a deep discount, but uses cheap materials that wear off in a few months.
Chimney Repair -- You see an ad in the local newspaper to clean gutters at a cheap price. After finishing the job the worker tells you your chimney is in dire need of repair.
Read the article Chimney Repair and Cleaning Scams for more info.
Hot Tar Roofing -- Contractors may sell these through mailings, telemarketing or by going door to door. The low-priced job sometimes uses substandard materials. When heavy rains cause roof leaks, your home's interior is damaged.
Duct Cleaning -- The scam artist uses a small vacuum cleaner that stirs up dust and other contaminants without removing them. It is very unusual that ducts would need to be cleaned. Mold will only collect if your filtering has been inadequate.
Recommendations: Follow the advice of a reputable contractor if you decide to go ahead with any of these (or other) home improvement projects. Always make sure the work truly needs to be done. And realize that if something seems too good to be true, it probably is.
For more information on how to work with contractors the right way -- and avoid home improvement scams -- visit our friend Tim Carter's AskTheBuilder.com website.