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Tips to help protect yourself from a contractor scam

Shady contractors and home repair scams can cost you. Discover tips to protect yourself from repair scams by learning how to spot home repair fraud.

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Clouds aren't the only things that roll in with tornadoes, hurricanes, wild fires or other types of severe weather. Also on that horizon are unscrupulous contractors trying to scam you. Home repair scams arrive in the aftermath of storms as shady contractors cash in by delivering substandard or incomplete work. Help protect yourself, your money, and your home from repair rip-offs by learning to spot the red flags.

What are warning signs of a shady contractor?

Be watchful of the following tactics. And remember, trust your gut. If you don’t get a good feeling about the contractor, don’t use them.

  • Offers unsolicited services: If a contactor stops by and gives you an unexpected estimate for projects like driveway sealing, chimney rebuilds and roof repair — projects that are commonly pitched to homeowners.
  • Has “material left over”: Be cautious if the quote includes a reduced price on the work because of "materials left over from a job down the street".
  • Home demonstration discount: If the quote includes a discount for using your home as a demonstration.
  • Extra pushy: Employs pushy door-to-door sales tactics.
  • Limited time offers: If the contractor says you need to place a deposit immediately to secure a spot in his schedule or to get a good price on material.
  • Not local: Appear to be from out of town or working out of a pickup truck.
  • Demands immediate payment in full: You should not pre-pay for any work.
  • Accepts cash only: Always a red flag.
  • Provides no written contract: All the details of the work should be written out in advance.
  • No references: And are not willing to produce them.
  • No insurance or licensing: Fails to provide proof of insurance and proper licensing.
  • Finance through a friend: Suggest financing or recommend financing through someone they know.
  • Ask you to secure any required permits: Most communities require the contractor to acquire the proper permits.
  • Not insured: Don’t take promises of insurance compensation for any repairs.

What should you look out for after a contractor begins a project?

  • Calls from subcontractors: Subcontractors are reaching out to you personally for payment for work completed.
  • Pricey unexpected expenses: It is common to have unexpected expenses arise, but when they are frequent or very expensive. Make sure to reach out to a home inspector or call another reputable contractor in your area for a second opinion.
  • Lack of activity: There is no activity on the job site during peak working hours.
  • Poor communication regarding progress: If your contractor stops returning your calls and is not showing up to the job site, contact your local Better Business Bureau.
  • Shoddy tools and low grade materials: Ensure the material the contractor is using matches what he listed on the estimate.

Ways to protect yourself from shady contractors

When looking for a contractor to remodel, renovate your home or to help you recover from a weather disaster, consider these tips.

  • Get multiple quotes from local established businesses.
  • Take time to make your decision.
  • Do your research. Look into professional affiliations and Better Business Bureau reports, and follow up on references from previous clients.
  • Check for up-to-date licenses, and verify insurance protection.
  • Insist on written estimates and a contract that includes contact information, important dates, and a breakdown of costs. According to Federal Trade Commission rulings, you may be able to cancel a contract of more than $25 within three business days of signing it at your home or in a seller's temporary business location.

The National Association of Home Builders offers additional tips for hiring a dependable professional contractor. For storm repair tips, visit the Better Business Bureau website. And before you hire any contractor for storm-related repairs, always contact your insurance agent to be sure repairs will be covered.

State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates) is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites hyperlinked from this page. State Farm has no discretion to alter, update, or control the content on the hyperlinked, third party site. Access to third party sites is at the user's own risk, is being provided for informational purposes only and is not a solicitation to buy or sell any of the products which may be referenced on such third party sites.

The information in this article was obtained from various sources not associated with State Farm®. While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. These suggestions are not a complete list of every loss control measure. The information is not intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. Nor is it intended to effect coverage under our policy. State Farm makes no guarantees of results from use of this information.


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