Five Home Improvement Scams (and How to Avoid Them)

In 1998, the Federal Trade Commission reported that, "home improvement fraud consistently ranks as one of the top three complaints from consumers." While things have been looking up since then, we are sorry to say that the threat of home improvement swindles is far from a thing of the past. Home improvements are expensive, and fraud of one variety or another in this field has left more than one homeowner out thousands of dollars. To protect yourself from being a victim, here is a list of a few circumstances that are easy to avoid once you know what to look for.

1. The "Free" Inspection
While there are some legitimate businesses that will offer free estimates on work you can hire them to perform, beware of advertisements offering free inspections of your foundation, roofing, heating system, or just about anything. The fact is a thorough inspection takes time and effort, which makes a good one worth paying for. In some cases, "free" inspections are ploys for burglars to scope your home, but more often, they are simply a way for contractors to drum up business by identifying "problems" that may not exist.

How to Avoid It: Hire a third party inspector who is not affiliated with a building company. These inspectors have nothing to gain by making up problems or exaggerating existing issues.

2. Advertising by Flyer
Though not always a scam, it pays to be wary of any service provider you hear about through a flyer stuck on your door or windshield. Flyers are an effective way to advertise, but the drawback to the consumer is that anyone (whether or not they are qualified) can print one. Certainly, anyone can take out an ad in the phone book, too, but this will require them providing, at the very least, an address. This makes the party traceable (and accountable) in a way that a flyer advertisement does not.

How to Avoid It: Throw that flyer in the trash (or, if you can, recycle it). If you really want some work done, choose a company that is traceable and can be held accountable for their work.

3. Door-to-Door Contractors
It sounds plausible: a contractor doing some work in the area noticed that your gutters need work as he or she was driving by. Since it's not a big job all this person needs to complete it is a few bucks to pick up the necessary materials at the hardware store. If you front the money, the person never shows up again. If you agree to pay afterward, the person overcharges you for two hours worth of shoddy work. It's a lose-lose situation (except for the traveling contractor).

How to Avoid It: Many good contractors are way too busy to go door-to-door and prefer to get new customers by doing great work and generating a reputation by word-of-mouth. If a contractor shows up at your door, tell them nicely, but firmly, that you already have a company you deal with for such work. If they persist, ask them to leave your property. If they still persist, call the cops!

4. The Handshake Deal
There is a certain sense of authenticity that comes with making a deal on someone's word. Unfortunately, there have been all too many cases where prices have been jacked up, timeframes have been ignored, and workmanship has been sacrificed and a trusting homeowner has been left without a leg to stand on.

How to Avoid It: The time is past when a person's handshake was as good as a written contract. Of course, if you know the contractor and have had a good experience with them in the past there's no reason to doubt them. However, when dealing with a new contractor, make sure that you get your estimate, the timeframe, and the work to be performed in writing.

5. No Credential Contractors
Beware of the contractor who doesn't have any record of good work. Most contractors will be happy to show you before and after photos or even give you the contact information of some previous clients.

How to Avoid It: Ask prospective contractors not just for their business card, street address, and phone number (things EVERY contractor should be able to provide on the spot), but for references, photos of their work, and about any associations (such as the Better Business Bureau) they may be a member of. Don't be afraid to check your contractors out!