How to Spot a Contractor Fraud

Here are some red flags you SHOULD be on the lookout for when hiring a contractor (July 27, 2017)

It’s a busy time for a lot of contractors here in the Sacramento Area. Due to the powerful storms and large amounts of rain, many residents are having a difficult time finding a contractor as soon as possible. This time makes it easy for con-artists to pose as contractors and get involved in fixing up your home, which can cost you a lot more. So before you hire anyone off the internet or through a flyer, here are some warning signs of a contractor fraud.

One thing to look out for is uninvited phone calls or visits to your home. Although some contractors do tend to market their business this way, it can be just as easily copied by a con artist. So be aware of someone who comes to your door saying they are offering you a, “Once in a lifetime,” price.

Unlicensed contractors might also ask you for a large down payment. Depending on where you live in the country, states govern how much money a contractor can ask up front for a deposit. Here in California, it's illegal to ask for or accept a down payment of more than ten percent of the total home improvement contracting price or a thousand dollars, whichever is less. If this person is asking for more than that, it can be a sign they will take your money and run.

When it comes to money, if you’re contractor can’t provide you with a bid, they shouldn’t be considered. A licensed contractor should be able to give you a bid before they begin working on your home. If they don’t, you might be taken advantage of.

Always be sure to ask for your contracting agreement in writing. A professional contractor will more often give you a complete contract that has a description of the work being done, materials that were used, cost of labor and names of subcontractors. That agreement should also include the contractor’s license number and address any issues of cancelling the building project.

Speaking of licenses, a qualified contractor should provide you with both insurance and licensing coverage. If the person won’t or can’t give you a copy of their license and insurance policies, at least ask for the license or policy numbers. Checking for legitimacy of a contractor can be easily found through a couple sites such as nationalcontractors or the contractor’s state license board.

© 2017 KXTV-TV


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