As people grow older, it can become more difficult to maintain a home, both physically and financially. Older people are also likely to need home renovations, especially if they hope to age in place. Scammers know this. That's why some pretend to be contractors. Their goal is to take advantage of people. Older homeowners are especially at risk. If you are concerned about scammers taking advantage of you or someone you love, you need to know how to tell the difference between a legitimate contractor and a scammer.
Watch for these red flags:
Pay Me First
According to the Better Business Bureau, this "Pay Me First" scam is the most widely reported. The contractor insists that you pay up front for the materials and equipment needed to complete the project. Once you hand over the money, the scammers either disappear or they complete the work carelessly.
You have hired a contractor and discussed the work you want to be completed. Now it’s time to sign the agreement. You notice that the contract fails to mention some of the requested work, but the contractor dismisses your concerns. He says, "Trust me. I'll take care if it," except that he doesn't take care of it. If you take the contractor at his word and sign the agreement, you'll be out of luck. The contractor will tell you that he did not include those extras in the quote and you will have to pay more to get those things done.
We Don’t Need a Permit
Any significant construction project requires a building permit. The permitting process allows officials to visit occasionally to ensure the work meets building codes. Dishonest contractors will try to tell you that a permit is not required for the work you want to do. Others will try to have you take out a homeowner’s permit, which means you will have to lie to the authorities about who is doing the work, making you responsible for monitoring the inspections.
Let's say that the construction has started or even finished and suddenly the contractor tells you there were unforeseen issues like termites that cause the price to go up. While cost overruns are part of many construction projects, dishonest contractors will bid very low to get their foot in the door and then increase the price later.
This type of fraud usually happens with scammers who pose as paving companies, roofers or painters. They tell you that they have extra materials and they can perform the work dirt-cheap. A few things can happen. They can take off with your money without doing the work. They may start the work, and then say it will cost more because the project is more complicated than they thought. Or the work is completed carelessly and your roof leaks or your driveway cracks within a few months of project completion.
How to Avoid Being Scammed
The best way to avoid being a victim of contractor fraud is to know what to look for and then steer clear. Carefully choosing the right contractor will help protect your home and your wallet.
Be wary of contractors who solicit your business uninvited. Companies that strong-arm you into making a quick decision, or insist you pay in cash, shouldn’t be trusted.
Ask potential contractors for references and check the company’s background.
Insist on a written contract. Contracts should include a detailed description of the work being done, the materials being used and a proposed completion date. Don’t sign the contract until you’re satisfied with the terms.
Check with friends, neighbors, or co-workers who’ve used a contractor you are considering If you can, take a look at the work done and ask about their experience.
Look at sites you trust that post ratings and reviews. Do people seem to have similar experiences, good or bad? You also can check out a contractor’s online reputation by searching for the company’s name with words like “scam,” “rip-off,” or “complaint.”
Find out how long they’ve been in business. Look for an established company whose record and reputation you can review;
Check for qualifications, like licensing. The Nebraska Contractor Registration Act requires contractors and subcontractors doing business in the state to register with the Nebraska Department of Labor. You can search all currently registered contractors and subcontractors on the Nebraska Department of Labor’s website at www.dol.nebraska.gov or by calling (402) 471-2239.
Older people are swindled out of more than $3 billion each year, according to the latest reports. Don't let it happen to you or the people you love.