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Preventing Home Repair Fraud

Homeowners can protect themselves from becoming victims of home repair frauds by educating themselves on their rights as consumers.

Consider the fact that Americans will spend an estimated $133.9 billion on contracted home improvement projects and do-it-yourself repairs this year. Because the home repair industry is thriving, it is lucrative for con artists, and each year Americans lose millions of dollars on fraudulent repairs and fixing the damage.

Below are examples of common home repair scams and tips for hiring a contractor.

Con artists carry out home repair scams in many different ways. A common example is the quick repair made with materials left over from another job. The con artist approaches a homeowner with an offer to repair the driveway or roof with materials left over from another job in the neighborhood. Many of these fraudulent workers appear after heavy rains, winds, snow, or other disasters that wreck lawns, roads, and driveways. What seems like a good deal for the homeowner turns into a nightmare when it becomes apparent that the con artist used inferior materials, made faulty repairs, or did not do the job at all.

Another typical scam is the home improvement loan scam where contractors persuade homeowners to finance the project through a lender the contractor knows. Once the job is underway, the contractor and lender pressure the homeowner to sign a series of blank or vaguely written contracts. The homeowner has unwittingly signed a contract for a home equity loan with alarmingly high interest rates and payments. To make matters worse, the contractor may not complete the job satisfactorily or even finish it at all. Similarly, homeowners may be tricked into signing papers that allow fraudulent contractors to obtain mortgages or assign liens against their property. In these instances, homeowners—especially older homeowners—could face foreclosure if they cannot make the high mortgage payments.

When considering potential contractors, homeowners should be wary of those who solicit door- to-door, just happen to have leftover materials from another job, accept only cash payments or ask for the entire payment up front, refuse to provide references, or suggest or insist that they borrow from a lender the contractor knows.

Homeowners should ask for a written contract that fully outlines the details of the job, including product and materials specifications, time lines, warranties, and payment schedules. Never sign a contract before reading it carefully or that has blank spaces to be filled in later.

Courtesy of the National Crime Prevention Council,


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