Home Improvement Scams Increase During Recession

It’s not uncommon in hard economic times for scams artists to become more prolific. Anyone who is not wary can become victimized by these unscrupulous persons. You should always ask a lot of questions of anyone who is working on your home, and be skeptical of offers that sound too good to be true.

Home improvement scams

The one-time special is a frequent home improvement scam. A contractor approaches you with a special offer that you must sign on for immediately, or it will expire. In reality, most businesses hold sales throughout the year. If a contractor approaches you with a one-time-only offer, ask him or her to show you past catalogs, special mailings, or a dated price list that proves that the price quoted is lower than past charges for identical work. The scam in this case is to pressure you into signing a contract before you’ve had time to get competing bids or check references.
Sometimes a contractor will knock on your door and say he’s doing a job for a neighbor just down the street. He may say he noticed some improvements that need doing on your house, such as roof repair, painting, or driveway coating. He may also say he has all his tools and materials with him and can start right away. This scam usually involved using leftover materials from a previous job. Ask him where the materials came from and who paid for them. It may be your neighbor is also being taken advantage of.
If a contractor wants to be paid in full before work starts, you should be very suspicious. If you fall for this scam, you are setting yourself up for a diapering contractor, along with your money. Usually, you would pay no more than a third of the total contract to cover materials and starting labor costs. The rest of the money can be paid depending on progression of the work. Hold most of the money until the project is finished, and make sure you are satisfied before making the final payment.
Be careful of contractors who offer to arrange financing for your project. Often, the contractor is getting a kickback from the lender. If you read the fine print, you may find you have signed up for a high-interest home-equity loan, or a similar scam. If you need a loan to complete your renovation, always shop around. If you do not understand the paperwork, consult a lawyer before signing.
A contractor who says he will remodel your home as a showcase for other customers is usually just trying to get work from you that really doesn’t need to be done. Don’t be tempted by a deal that seems too good to pass up. Contractors don’t need a model home to show off their work, and even if they did, why would they choose your home?
Always check a contractor’s credentials and licensing before hiring him. Use common sense to avoid home improvement scams. If a deal seems too good to be true, it probably is. Get more than one estimate, and don’t sign anything until you understand the contract completely.