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10 Types of Scam Contractors to Avoid

Hiring a contractor for home renovations or repairs can be a stressful experience. Most contractors are honest professionals, but some unscrupulous ones prey on unsuspecting homeowners, relying on the assumption that they are unaware of licensing and insurance standards, unfamiliar with the remodeling process, and unlikely to get a second opinion.  Being able to recognize the signs of a shady contractor can help you avoid becoming a victim. Here are 10 types of scam contractors to watch out for, and some tips on thoroughly vetting your contractor.

At Fine Home Contracting, we would of course love for you to choose us as your contractor, but whether you go through us or the competition, we want you to have the resources at your disposal to find the best fit for your project, avoid potential scams, and feel secure in your choice.

Most Common Contractor Red Flags

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The Disappearing Act

This scam starts out promisingly enough. The contractor provides a reasonable quote, agrees to do the job, and may even start work. However, at some point the contractor takes your deposit and vanishes without completing any of the agreed upon work. He or she ignores all attempts to contact them, leaving the project half-finished.

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Bait and Switch Pricing

Some contractors will initially provide a very low estimate to undercut their competitors and win the job. However, once work begins they start piling on additional fees for unexpected issues. These extras can really add up, resulting in a final bill that is two or three times the original quote. Legitimate cost overruns do happen, but excessive, vague fees are a red flag.

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Shoddy Workmanship

Shady contractors often cut corners in their work. This allows them to get jobs done quicker and move on to the next victim. They may use inferior quality or insufficient materials, ignore building codes, or take other shortcuts. The result is a finished product that looks good superficially but falls apart upon closer inspection.

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Demands Full Payment Upfront

Most contractors require a percentage downpayment to purchase materials, with the balance due upon satisfactory completion. Scam contractors often insist on full payment before work begins. They claim they can offer a discount for payment in full upfront, which is very tempting. In reality, once they get paid there is little incentive to do a good job or even finish.

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Doesn’t Pull Required Permits

Reputable contractors will obtain all required permits for the project and call for inspections at appropriate stages. Shady contractors skip this process to save time and money. This puts homeowners at risk of fines, delays during sale of the home, or serious issues down the road if work was substandard.

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Uses High Pressure Sales Tactics

Scam contractors are eager to pressure people into signing contracts before they have time to thoroughly evaluate the deal. They may offer special one day only pricing or claim the deal is only available to the first few customers. This prevents homeowners from shopping around, comparing bids, checking references, and making an informed decision.

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Lacks Proper Licensing and Insurance

Most states require contractors to hold a valid license, and carry both general liability and workers compensation insurance. Ask to see the contractor’s license, and verify it is current. Also get certificates proving proper insurance, and confirm they are not expired. Lack of proper credentials is a huge red flag.

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Has Lots of Complaints Against Them

Do some digging to check for customer complaints. Search online review sites and sites like BBB.org, Houzz, and Angie’s List. Check with your state Attorney General’s office to see if complaints have been filed. Look for consistent themes in the complaints that indicate shoddy work or dishonest practices.

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Refuses to Sign a Detailed Contract

Detailed contracts protect both homeowners and contractors. Scam contractors often resist signing one. Without a contract, it’s just your word against theirs when disputes arise. A contract should include full project details, timeline, payment schedule, warranty terms, and more. Refusal to sign is a sign of trouble ahead.

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Their Price is Too Good To Be True

If you receive multiple quotes at different prices, and one contractor’s proposal is significantly cheaper, it may be a red flag. While costs vary between quoting companies, a concerningly low quote implies that the contractor is underspending somewhere else in your budget compared to the competition. Whether that money comes out of material costs, labor, or management, a concerningly low price is a sign that corners are being cut.

How to Protect Yourself from Scam Contractors

While we like to think most contractors are upstanding professionals, it pays to be cautious when handing over your hard-earned money for home projects. Here are some tips to avoid becoming victimized by unscrupulous contractors:

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Check References and Reviews

Always get references from previous customers, and take time to call them. Also research online reviews carefully. While no contractor will have perfect reviews, look for any consistent complaints or themes that suggest issues down the road.

Useful resources to vet contractors include:

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Get Multiple Bids

Don’t just go with the first bid. Interview 3-4 contractors and get quotes. This allows you to ask lots of questions and compare bids fairly to choose the best fit for the job and budget. View each meeting as a job interview, where you are assessing not only the promises the company makes, but their customer service throughout the quoting process. If your contractor’s customer-facing sales team is unfriendly, it’s safe to say that you might not have a great experience with their workmen.

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Require a Detailed Written Contract

The contract should specify exact project scope, materials, timeline, warranty, payment schedule, and more. Make sure permit fees are included, never pay 100% upfront, and tie payments to progress milestones. A detailed contract should set expectations about how unforeseen changes are handled. Ask your contractor about Additional Work Orders and Change Orders, and how equipped they are to handle any sudden changes to the plan.

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Pay in Installments

Avoid paying large sums upfront. Most projects require 10-35% down with progress payments tied to completion of milestones. Withhold 15-20% of total price until the end to ensure satisfaction.

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Verify Licensing and Insurance

Check credentials are valid and current before signing a contract. Unlicensed, uninsured contractors put you at great financial risk if things go wrong. Being insured unfortunately doesn’t always mean that your contractor is fully covered, so it is important to ask about Workmans Compensation coverage and other contingent insurance.

To check a contractor’s license is valid in Connecticut, use the following tool provided by the State:

Finding a trustworthy, skilled contractor takes research and due diligence. Avoid being pressured into quick decisions or handing over too much money upfront. Thoroughly check out potential contractors, get multiple bids, and take time to verify references, reviews, licensing, and insurance. Secure all agreements in a detailed written contract. Pay in installments as work is completed satisfactorily. Following these tips will help you find the best contractor for the job and avoid falling victim to scam artists.

FAQ

What steps can I take to prevent contractors from cutting corners in my project?2023-10-19T15:28:35+00:00

Regularly communicate with your contractor, inspect the work, and ensure all agreements and specifications are included in the written contract.

What are the most common shortcuts taken by contractors in home improvement projects?2023-10-19T15:28:03+00:00

Common shortcuts include backstabbing outlets, neglecting plumbing vents, subpar insulation, rushed drywall finish, improper grading, and skipping permit requirements, among others.

Are there any legal remedies if a contractor cuts corners and the work is subpar?2023-10-19T15:27:40+00:00

Legal remedies may be available, depending on your contract and local regulations. Consult with an attorney if necessary.

What are signs of a shady contractor for a home addition?2023-09-20T14:12:37+00:00

Demanding full payment upfront, no written contract, no fixed pricing, high pressure sales tactics, lack of license and insurance are red flags.

How can I verify a contractor is properly licensed in Connecticut?2023-07-19T14:15:38+00:00

You can verify licensing by checking with your state contractor’s licensing board. Make sure the license is current, valid for the type of work required, and associated with the business name the contractor provides. The State of Connecticut license verification site is available at https://www.elicense.ct.gov/

What percentage should I pay upfront for a remodel before work begins?2023-07-19T14:07:07+00:00

10-35% is typical for a downpayment to cover material costs. Reputable contractors will not ask for full payment until the job is complete and you are fully satisfied.

What should I do if I encounter unexpected costs or delays during my home renovation project?2023-06-07T13:31:08+00:00

The best way to avoid unexpected costs and delays is to create a detailed project plan and address any issues as soon as they arise. However, if you do encounter unexpected costs or delays, communicate with your contractor immediately and work together to find a solution. If necessary, consider hiring a mediator or filing a complaint with your state licensing board.

What are some common home remodeling scams to watch out for?2023-06-07T13:30:53+00:00

Some common scams include disappearing contractors who take your money and run, upfront payment scams where the contractor demands full payment before starting the work, and low-ball estimates that seem too good to be true. Always be wary of contractors who refuse to provide references or cannot provide proof of insurance and licenses.

How can I tell if a contractor is trustworthy?2023-06-07T13:30:37+00:00

Before hiring a contractor, check their credentials, ask for references, and read online reviews. It’s also important to ask for proof of insurance and licenses. A trustworthy contractor will be transparent about their experience, qualifications, and pricing. If something seems too good to be true, it probably is.

Do I really need a contractor for my home renovation project?2023-06-07T13:30:17+00:00

It depends on the scope of your project and your level of experience. If you’re planning a major renovation or if you’re not comfortable working with certain tools or materials, it’s best to hire a professional contractor. However, if you have experience and are comfortable tackling certain aspects of the project on your own, a combination of DIY and professional work may be the best approach.

Published On: July 19th, 2023 / Categories: Home Improvement Contractor, Home Remodeling, Uncategorized /

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