Home Contractor Scams on the Rise

American homeowners spent an estimated $567 million on home improvement in 2022, according to a report from the Joint Center for Housing Studies at Harvard University. So it should come as no surprise that many homeowners are targeted by scam artists posing as contractors. Around 83,000 reports of home repair, improvement, and product scams were reported to the Federal Trade Commission in 2023.

Who Do They Target?

Research shows that 30 percent of all scam cases in the United States list seniors as victims. The elderly are preyed upon by fraudulent contractors and scammers because they’re more susceptible to scams than other age groups. Fraudsters also know that this cohort has access to funds, as seniors own more than half of all the financial assets in the U.S.

Other factors in play: Many elderly homeowners live in older homes that usually need updates and repairs. This means when scam artists come knocking with a deal, some seniors may not ask as many questions because they do need work done.

Dishonest contractors or scammers also target communities affected by extreme weather disasters. These vultures prey on stricken communities by offering fast debris removal or quick, cheap repairs to homes and businesses. The scam artist will usually ask for payment upfront or try to persuade the desperate homeowner to sign over an insurance check. They take advantage of residents when they’re most vulnerable by either overcharging for inferior work or taking the money and leaving the area.

How Do Scams Work?

A common scenario in home contracting scams is for the con artists to descend on a neighborhood (often targeting an area housing multiple elderly residents) and go door-to-door. Sometimes they’ll say they were passing and noticed something wrong with the homeowner’s roof. Or they’ll offer to repave the driveway or paint the house. Another common tactic employed is to offer a discounted price on repairs because they have leftover materials from another job “just down the street.”

Red Flags

• High-pressure tactics: Scammers create a sense of urgency once they see that a homeowner is interested. They’ll say the discounted rate is only available today or that some other homeowner is waiting for the leftover materials. Their aggressive tactics force the homeowner into making a quick decision and handing over cash.
• Wants upfront payment: No honest contractor will ask for payment in advance for the whole job. Once scammers get the green light, they demand a large cash deposit or even the entire payment.
• No contract: Be wary of anyone promising to do work for you without a written agreement or contract. Get everything in writing.
• No credentials: Legitimate contractors are happy to show you their license and insurance information. Scammers won’t be able to produce any paperwork, nor will they be able to pull the proper permits needed for some jobs.
• Work never started or poor-quality work: Often, the scammers simply take the cash and disappear. If they do start the project, the workmanship will likely be shoddy, the materials substandard, and the project not done to code.
• Driving a rented truck: Legitimate contractors will have their name, phone, and license number printed on the side of their commercial truck — as required by the state. Chances are, anyone showing up at your home in a U-Haul is likely not a professional.

How to Avoid Door-to-Door Scams

The easiest way to avoid being targeted is to simply not answer the door when a stranger shows up unannounced. Or close and lock the door quickly after telling them you’re not interested. Be careful, especially if you live alone, and think before letting someone you don’t know into your home.

What to Do If You’ve Been Targeted

If you believe you’ve been scammed by an unscrupulous contractor or con artist, it’s important to act promptly:

• Document what happened: Write down as much as you remember. Include any names (if available) and dates. Also note if the scammer mentioned working for a certain company.
• Report the fraud: Contact your local law enforcement. They may investigate and take action.
• File a complaint: Provide the details of the scam and any evidence you have to your state’s consumer protection agency or the Better Business Bureau (BBB).
• Let people know: Alerting your neighbors and family can help prevent others from falling victim if the perpetrators are still in the area.

How to Find Trusted Contractors

Say you do need something done in your home. Whether it’s a simple repair or an extensive remodel, it’s best to hire a professional to ensure the job’s done safely and correctly. Finding a reliable contractor is one of the most important steps in any home project.

Hiring the wrong person can cause a multitude of problems — the least of which is being faced with rising costs and unfinished work. There’s also the potential for more serious repercussions.

Using an unlicensed contractor or scam artist can result in:

But how do you confirm that the contractor you’re considering is legit? Check with the Better Business Bureau or ask your insurance company for recommended contractors in your area. If you’re a Wawanesa member and need referrals, we can put you in touch with vetted contractors to assist with your improvements or maintenance needs. These contractors offer workmanship warranties on repairs, so you can rest assured the job will be done right.

Pro Tip: Operating without a valid contractor’s license is illegal, and even if a lower bid is tempting, the contractor in question will likely not carry liability insurance. This coverage is crucial as it protects you, the homeowner, should anything go wrong.

You can also research a contractor’s credentials at the California State License Board. After making sure the candidates for your job are all licensed and insured, make a shortlist and gather quotes from them. The bids should all be in the same ballpark. If one bid is significantly lower than the others, it could be a red flag signaling that the contractor in question plans to use cheaper materials or take other shortcuts.

By understanding the common tactics used by con artists, homeowners can avoid being taken advantage of. Stay vigilant and perform due diligence to protect yourself, your home, and your finances. And remember — if you’re offered a deal on home upgrades that seems too good to be true, it probably is!

If you have any concerns about your home or home insurance, don’t hesitate to get in touch — our helpful Wawanesa agents are here to answer any questions.