Don’t be a Victim of a Scam Contractor

Posted in Consumer Protection Articles, Fraud and Scam Articles

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by Vee Daniel, President and CEO, Better Business Bureau of the Upstate 

The storms that blow through during this time of year can leave downed trees and other damage in their wake. That’s when “storm chasers” appear. These scam contractors prey on homeowners by promising repairs, collecting a fee and failing to deliver.

How the scam works

A major storm just blew through your city, knocking a tree onto your roof. The next day, a contractor appears at your door. He gives you a great price, and, if you commit now, he can begin work the next day.

The contractor will either want upfront payment or for you to sign a contract allowing him to negotiate with your homeowners insurance on your behalf. If you do this, your entire insurance check may go to the contractor regardless of the quality or quantity of work completed.

Some storm chasers complete the job as described. However, sometimes poor craftsmanship and materials mean that you need the roof repaired again a few months later, when the business has moved on to a new storm-damaged region. In more extreme cases, contractors may simply take your payment, completing part or none of the work, and disappear.

Our advise to you

Better Business Bureau (BBB) of Upstate South Carolina is offering guidance to area residents who have suffered property damage, and reminds you to take precautions when cleaning up and making repair decisions. Unfortunately, there are a few contractors out there who are only interested in making a fast dollar. To help property owners find reputable contractors, BBB provides the following tips:

  • Contact your insurance company immediately. Inquire about coverage and filing.
  • Document the damage to your property (and autos); take pictures or video if possible. Compile an inventory of your damaged personal property.
  • Do not make any permanent repairs until you get approval from your insurance company. Make any minor repairs to limit further damage to the property. You may be liable for damage that occurs after the storm has passed, so make temporary repairs to prevent further damage. Save all of your receipts.
  • Get references from friends and relatives and contact Better Business Bureau to obtain free Business Reviews on any company you are considering hiring. Visit bbb.org or call (864) 240-2080. Shop around and get more than one estimate.
  • A contractor should be responsible for obtaining all necessary permits and provide you with SC license, proof of liability and workers compensation insurance. Understand the difference between warranties and guarantees. The manufacturer warranties their products and contractors have warranties on service. Request copies.
  • Refrain from filing an insurance claim on something that you do not intend to fix. There could be repercussions from your insurance company when you do not make repairs for which you are compensated.
  • Some companies list bids on their own contract to do service work on your home/property and some do not (basing their pricing on “insurance allowance”). Both are acceptable methods of conducting business.
  • Prepare a written contract agreement with anyone you hire. It should specify the work to be done, the materials to be used, and the price breakdown for both labor and materials.
  • Be aware that anything you sign is a contract. Read carefully and avoid signing an “estimate” or “authorization” form before you have actually decided to hire a particular contractor.
  • Be sure the name, address, license number and phone number of the contractor appear on all invoices and contracts.
  • Any promises made orally should be written into the contract, including warranties on materials or labor.
  • Never pay in full for repairs in advance, and do not pay cash.
  • Review all documentation before signing on the dotted line and before making any payment. Be sure it specifies the schedule for releasing payments to the contractor. Ask for a start and end date for the work to be done.
  • Although you may be anxious to get things back to normal, avoid letting your emotions get the better of you. Don’t be pressured into making an immediate decision with a long-term impact. Make temporary repairs if necessary. Storm victims should never feel forced to make a hasty decision or to choose an unknown contractor.

BBB of the Upstate is here to help. For assistance, call the BBB Elder Fraud program hotline at (864) 240-2080, or email questions to info@upstatesc.bbb.org. The mission of the BBB Elder Fraud program is to assist seniors in recognizing and resisting fraudulent offers and possible scams. If you would like to check out a business online, visit www.bbb.org/upstatesc.