Beware of Home Repair, Contractor, & Insurance Scams!

 When it comes to my own thoughts about home repair and contractor scams, I think of the time when my mother’s house burned, almost to the ground back in 1987; she lost everything. When it came time for the insurance company to pay out on the policy in order to find a contractor to rebuild it—she had to secure the necessary three bid minimum from local contractors—the insurance company naturally went with the lowest bidder. What I remembered in particular about her ordeal was that when the contractor (and related sub-contractors) had finished, her house looked like a dream home you’d find in a magazine…a least on a superficial level. It was not long before she’d encountered unusual wiring problems such a certain light fixtures constantly and inexplicably blowing light new light bulbs at an unusual rate. Other problems cropped up too, such as leaking pipes (we actually found one set of pipes that hadn’t even been joined together properly), insufficient insulation (almost lunacy during a cold Michigan winter), and a roof which eventually began to leak. Although the primary contractor was licensed, I cannot say with a level of assuredness that the subcontractors used were licensed.
It took my brother and a proverbial army of self-hires to repair the shotty work.
Thinking back to last week’s storm on the East Coast, I imagine that the owners of some of the hundreds of homes damaged and/or destroyed during the so-called “superstorm” Hurricane Sandy will be in jeopardy of a similar experience. Over the weekend, NBC’s The Today Show did a piece on unlicensed contractors are coming out of the woodwork, and passing themselves off as licensed and/or bonded contractors in order to make a fast buck from the victims of Sandy. The following video highlights how unlicensed, for example how unlicensed tree trimmers are passing themselves off as licensed contractors for people desperate to have debris cleared from their properties:

The “red flag” here is that most reputable contractors won’t come to you; the more unscrupulous individuals and outfits will usually show up on your doorstep unsolicited, inquiring about whether or not you need their services. Such an approach should be treated with skepticism. Resist the probable high-pressure selling tactics that will come from this approach!
With an estimated damage cost of $25 billion and dollars and rising, home-owners and insurance companies alike will be under pressure, mostly from the quickly changing seasons and the approach of inclimate weather to begin repairs so that displaced residents can have some shelter from the approaching winter. And it’s a sure bet that in addition to individuals claiming to be able to clean up properties, others claiming to be able to do actual labor and/or home repair “cheap” will also target not only Sandy survivors, but others who might find themselves in need of home repair at some point.

I would urge anyone in need of home repair or any other related services to observe the following caveats:

-Ask to see a license. If indeed you are truly dealing with a reputable company with an established presence, its representatives should have no problem showing you a copy of a license recognizing the right to perform the work they advertise. If any such outfit is only capable of producing nothing but excuses as opposed to an actual license, slam the door!

-Employ due-diligence. Be willing to research and chock out any prospective contractors as well as insurance company. In addition to asking to see their license, check out whether or not there are complaints filed against any business entity you are considering doing business with. The Better Business Bureau and Consumer-friendly sites like Angie’s List are great places to start to check the integrity of insurers and building contractors.

-Avoid paying up front. If a contractor requires money up-front (usually as a good-faith gesture of their sincerity and of your seriousness), limit any up-front payment to less than half the total cost; 1/3 of job cost is a good number.

-Avoid high pressure tactics. If someone “offers” to “do you a favor” by “starting right away,” especially if they “like you” or want to give your job priority—especially for more cash—be skeptical. A little healthy skepticism is a good thing when it comes to preventing being taken to the cleaners.

-Use your insurance company’s resources. Most have a preferred set of contractors they usually work with, or are willing to recommend for their customers. Most reputable insurers take the time to check out local contractors for mostly for this reason…to weed out the fly-by-nighters.

-Shop around. Don’t be afraid to go around to multiple contractors and insurers and obtain multiple quotes. If you must, check them against the going market rate for similar labor and contract work. Being able to compare reasonable prices for contractor labor is a good way for anyone willing to trust their instincts to weed out probably scammers themselves.

-Report any suspected scammers. Although this may be somewhat embarrassing, even the most intelligent people are capable of being taken in by astute and practiced scammers. At this point, it’s time to swallow your pride and report any attempted and/or actual scams you might have found yourself on the receiving end of. Contact your local police department, or head to one of the various consumer reporting sites such as Consumer Fraud Reporting.

As I have observed in my own life, taking the time to think with your head rather than with you wallet can pay off in terms of saving the misery, money and mortification that comes along with knowing that someone scammed you out of your hard-earned money...especially in troubling times such as these.