Avoiding Fraudulent Contractors

Fraudulent contractors are a blight on the contractor industry. Unfortunately, home improvement lends itself to contractor fraud and contractor scams. To protect yourself from these unscrupulous members of the building community (most contractors are honest, upstanding members of society), there are several practices to look out for and several steps you can take to ensure you don't become a victim.

Get an Honest Referral
Your best bet when it comes to avoiding fraudulent contractors is to go through the proper channels. Sure, you might get cheaper rates from a door-to-door salesman or someone recommended by a stranger, but you should never go with the cheapest price you can find. In fact, unusually cheap prices typically means sub-par work. Using ServiceMagic, or a trusted friend's recommendation, is the best way to get a contractor you can trust. Doing so will save you bundles of money in the end, especially if your cheap alternative ends up taking you for a ride.

Watch Out for "Travelers"
The most common contractor fraud involves "travelers" that go door-to-door soliciting work they never plan to provide. Be it roofing or remodeling, these scam artists posing as contractors offer cut rate prices with a sales pitch that often includes reduced prices due to left over supplies from a job purportedly done in the area. The best way to avoid being a victim of this scam is to hit the phone book. Don't accept offers from any door-to-door salesmen, ever. Instead call at least three reputable contractors in your directory to get bids on your job. If they post a listing in the yellow pages, at the very least you'll know where to find them, and send your lawyers, if something goes wrong along the way.

Avoid Fraudulent Contractors by Never Paying Cash Up Front
An easy way to spot contractor fraud is the payment schedule. A reputable contractor will never ask for cash, and will never require that the entire job be paid "up front." If a contractor asks for such provisions, your red flag should go up immediately. A good contractor rarely seeks payment until the job is done. Anyone who asks otherwise is probably looking to take your money and run. It's a tried and true tactic of fraudulent contractors, especially the aforementioned "travelers."

Building Permits Are Their Business
Another way to spot a contractor who doesn't know the business is if they ask you to obtain your own building permits. A good contractor should do all this work themselves. It's part of what you're paying them for. If they ask you to do permit legwork yourself, it's time to sever your ties and look for somebody who is willing to do the job you're paying them for.

Other Protective Measures
Besides keeping an eye out for the previously mentioned warning signs, there are a number of other steps you can take to protect yourself from fraudulent contractors.