Home improvement projects present the biggest opportunity for scammers to take advantage of homeowners, according to the Better Business Bureau’s Risk Index. Victims of home improvement scams lost an average of $1,400 from shady contractors, painters, and other repairmen, according to the BBB’s analysis.
The analysis found that such scams pose the highest risk to homeowners based on three criteria: exposure (how likely consumers are to be exposed to the scam), susceptibility (how likely they are to lose money), and monetary loss (how much money they stand to lose). For example, victims may be conned out of money by receiving a lowball bid from a contractor who then later demands more money to finish the project. A contractor also may use someone else’s license to take money and leave without ever completing the project.
Realtor.com® offers the following tips to avoid becoming a victim of a home improvement scam:
Verify the contractor’s license, insurance, and at least three references. “Don’t be afraid to ask for their license numbers upfront,” says Cedric Stewart, a real estate professional at Keller Williams Realty in Washington, D.C. “Some states have online databases where you can check the license status.”
Ensure the contractor is an active member of a reputable industry organization. Contractors affiliated with the National Association of the Remodeling Industry or the National Kitchen and Bath Association are more trustworthy professionals, suggests Jonathan Weinberg, CEO of Builder Prime, a software service for contractors. “This is another indication that the contractor you are hiring is reputable, as they will need to pass a level of scrutiny and pledge to observe a code of ethics in order to be a member of one of these organizations,” he says.
Check the contractor’s reputation online. “Do they have a good website and active social media? That’s a good sign,” says Sam Medicraft, a former general contractor. “Most scammers want to disappear, so they leave as few traces online as possible.”
SOURCE: DAILY REAL ESTATE NEWS
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