Could a Home Improvement Scam Cost You $1,400? How to Stay Safe

Get-rich-quick schemes, phishing, rubber checks or money orders … odds are you’re hip to these con games and know to steer clear. Yet according to the Better Business Bureau’s Risk Index—an analysis of the scams consumers fall for—the greatest danger of a shakedown could actually be lurking in your home improvement projects.

In 2016, over 32,000 scams were reported to the BBB, which deemed scams surrounding home improvement the biggest risk based on three (unfortunate) criteria: how likely consumers are to be exposed to a con, how likely they are to lose money, and how much money they lose. Apparently, victims of shady contractors, painters, and other repairmen are bilked an average of $1,400.

This typically takes the form of servicemen giving lowball bids, then demanding more money later, or using someone else’s license to take your money and run. Don’t want to be a victim? Here’s how to protect yourself.

Check contractor’s license, insurance, and references

Even if your contractor was recommended to you by a friend or family member, make sure the contractor has a valid license.

“Don’t be afraid to ask for their license numbers upfront,” says Cedric Stewart, a real estate consultant at Keller Williams, in the Washington, DC, area. “Some states have online databases where you can check the license status.”

A Google search for “check contractor license in [your state]” should point you in the direction of a website that allows you to input your prospective contractor’s license number to make sure it’s up to date.

You should also, without hesitation, ask for at least three, if not more, references.

“Scammers usually have a couple projects that went well in the past, and they will use them repeatedly as references,” says former general contractor Sam Medicraft.

Make sure the contractor is affiliated and active

Jonathan Weinberg, founder and CEO of Builder Prime, a software service that helps contractors grow their business, recommends that consumers do a quick search (either online or by inquiring the contractor directly) to see if the contractor is a member of reputable organizations such as theNational Association of the Remodeling Industry or the National Kitchen and Bath Association.

“This is another indication that the contractor you are hiring is reputable as they will need to pass a level of scrutiny and pledge to observe a code of ethics in order to be a member of one of these organizations,” he says.

While you’re at it, check out the vendor’s online presence.

“Do they have a good website and active social media? That’s a good sign,” says Medicraft. “Most scammers want to disappear, so they leave as few traces online as possible.”

What to do if you suspect you were scammed

After placing your faith in someone to complete the job, it’s an unsettling feeling when you realize they might not have done everything you agreed upon. Where can you turn?

In these situations, Jody Costello, founder of contractorsfromhell.com and creator of the Home Remodeling Bootcamp for Women, recommends that you file a complaint with your state Contractors License Board or Consumer Protection Agency, as well as the BBB. But she cautions that restitution is slow and relief might not be what you’d hoped for.

All of this means it really pays to do your homework upfront before that handyman is even hired.

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