Home improvement fraud is becoming more common, with homeowners being swindled out of money they paid in good faith for repairs or renovations to their property. It can be defined as a builder or contractor taking money for incomplete or improper work to scam clients.
If you’re the target of home improvement fraud, there are important things you can do. One of them is seeking legal guidance from a vetted, experienced lawyer on ContractsCounsel, a legal network connecting clients with professional lawyers.
They’ll listen to your concerns and guide you on how to deal with the fraud in a way that protects your interests and gives you a favorable outcome.
Read the rest of this article to learn more about the different types of home improvement fraud, how to prevent them, what to do if you’re the victim of this fraud, and how to take legal action in the correct way to recover your losses.
What are Common Types of Home Improvement Fraud?
Scammers show up in a variety of ways when trying to target you for home improvement fraud, and they usually appear believable and professional. Here are some of the most common ways they’ll trick you.
- They offer free inspection scams. This is when a contractor will tell you that there’s a problem with your house or roof and offer a free consultation for the work. Many people see this scam after natural disasters, when the scammer pretends there’s damage to the house and preys on homeowners’ fears.
- They add extra costs to the initial quote. You hire a contractor to do work at your house. During the project, they identify other tasks that “need” to be done, which makes you pay them more.
- They want full payment upfront. The contractor might demand full payment for the job before they begin. This is a red flag that they could run off with the money.
- They do low-quality work. This type of fraud can show up in many ways. The contractor might lie about obtaining work permits or be using low-quality materials.
- They draft vague contracts. Unclear, generic, or confusing contracts could be a way for a contractor to inflate expenses because they haven’t properly identified the work scope or payment terms at the start of the project.
How Can You Prevent Home Improvement Fraud?
When thinking of hiring a contractor for renovations or repairs, you should do some important things to protect yourself against scammers.
Check Licenses
Before you hire a contractor for the job, check their license and insurance. Do a bit of background work by checking their license with the state government. Request insurance proof from the contractor. If you can’t find their license or they don’t want to give you their insurance information, don’t work with them.
Avoid Contractors Who Pitch Up at Your House
When a contractor arrives at your property to tell you of damage they can see on your roof or mentions that they were just working nearby and can provide you with a free quote for renovations, this should be a red flag.
Be wary of contractors you haven’t hired for work and say no to their offers of free inspections because, in these cases, they might involve hidden expenses.
Get Quotes from Many Contractors
You should request estimates for the work you want done on your property from a few contractors, instead of just one. Compare the prices and materials. Ask questions about the work scope, especially if this isn’t outlined.
You want the quotes to be clear and detailed so that you have written proof of what the work and payment will entail, preventing disputes later.
Review Your Contract
Don’t sign a contract before you’ve reviewed it properly. A lawyer from ContractsCounsel can help you by checking for any vague or misleading terms or red flags. If your contractor doesn’t want to provide a contract, don’t work with them. You want everything to be clear, legal, and fair to both parties.
You can request a contract review on ContractsCounsel by posting a free project. After you do, vetted lawyers on the platform will bid on your project. You can choose the best one for your specific contract.
How Can You Deal with Home Improvement Fraud?
If you’ve been scammed by a contractor, you should act quickly.
Stop Making Payments
If you’ve been paying the contractor, cancel your checks and stop credit card charges. Contact your bank to inform them of the money you’ve sent. They might be able to reverse the charges and stop the transfer.
Collect Important Evidence
This will help you if you have to take legal action. Gather receipts, transaction receipts, contracts, and any communication with the contractor.
Report the Scammer
Head to the Better Business Bureau’s website where you can use their scam tracker to file a report against the scammer.
Contact Your Home Insurance
It’s worth contacting your insurance provider and informing them of the fraud. They might be able to provide coverage if you’ve suffered damages.
Contact a Lawyer
A lawyer from ContractsCounsel has years of experience in dealing with home improvement fraud, so they’ll be able to offer sound legal advice. They can take action against the fraudster to protect your interests. Some things they’ll do to help you include:
- They’ll send a demand letter, telling the contractor about the lack of performance and how it needs to be corrected or there will be legal consequences.
- File a civil lawsuit to recover your financial losses.
- Review and draft contracts to ensure they are legal and transparent, without any vague terms.
- They will gather evidence about the fraud and guide you through your best legal options.
- They can negotiate with contractors and insurers to reach a settlement or handle refunds.
- They’ll provide a clear, objective perspective on the situation.
Do you need a lawyer for home improvement fraud?
If you suspect a contractor of committing fraud or they’ve already caused you financial losses, you should get in touch with a lawyer on ContractsCounsel. Even if you’re dealing with poor workmanship that isn’t fraud, a lawyer will help you best navigate the situation to lower your stress and achieve successful results.
