Sooner or later every home needs repairs or improvements. Although some home improvement companies do good work, some may not provide the level of service you expect. Many homeowners are targeted by scam artists who use high pressure tactics to sell unneeded and overpriced contracts for "home improvements." Often these scam artists charge more than their quoted prices or their work does not live up to their promises. When the homeowner refuses to pay for shoddy or incomplete work, the contractor or an affiliated lender threatens foreclosure on the home.
A home improvement scam could start with a telephone call or someone knocking at your door offering to "help" you with home repairs. Here are some of the warning signs to look for -
When a salesperson:
- Contacts you first (comes to your home uninvited or contacts you by telephone);
- Tells you that you need to make repairs immediately;
- Tries to confuse you or pressure you to sign papers today;
- Tells you that they are doing work in your neighborhood and claims they have "extra materials" left from another job;
- Offers to use your home as a "display home" or offers a discounted price or "discounts" for referrals, but only if you buy today!
- Tells you something that sounds too good to be true.
Tips to Avoid Scams
- Do your homework and be prepared. Before you contact a home improvement company, decide first what you want to have done and how much you can afford to spend. Don't let the company decide for you.
- Talk to friends and family to get names of reputable contractors they have used.
- If you need financing to pay for home repairs, shop around first. The financing offered by a contractor may be expensive, so check with banks, credit unions, etc., to see if you can find a better deal.
- Get at least two estimates: Many companies give free inspections and written estimates -- get two or three before choosing a contractor. Remember that the lowest price is not always the best deal. Compare costs, materials, and methods suggested by different companies to decide what materials and methods are best for your home.
- Check out the contractor: Is the company reputable? How long has it been in business? Ask for references and then check them out! Make sure the company is licensed, bonded, and insured. Contact the Better Business Bureau to check on complaints.
- Understand the contract: Do not sign the contract until you read it carefully. If the salesperson pressures you to sign before you read and understand all of the contract - don't sign it! Never rely on the salesperson to read or explain the contract to you. Ask a trusted friend or lawyer to assist you.
- Do not let someone talk you into buying something you don't need -- or can't afford.
- Do not pay for repairs in advance. Pay the final payment only after the work is complete.
- Do not sign a contract unless: It includes a detailed description of the work to be done and specifies exactly what materials will be used and their quality;
All of the contractor's promises are in writing; The contract includes the starting date and estimated completion date; and - The contract is fair and the terms (including the price, finance charges and payments) are what you agreed on. If not, do not sign it! Be sure to get a copy of everything you sign when you sign it.
If you think you have been the victim of a scam or home repair fraud, contact the Governor’s Office of Consumer Protection at 1-800-869-1123.
Other Resources:
- Avoiding Home Repair Fraud (Governor's Office of Consumer Protection)