FraudWatch: Eight Ways to Save Your Home from Crooked Contractors

Advice from John Sargent, Chairman, New York Alliance Against Insurance Fraud

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ALBANY (08/16/2011)(readMedia)-- Summer and autumn are great home-improvement seasons, but also happy hunting times for shady contractors who try to bilk homeowners with shoddy and inflated repairs, warns the New York Alliance Against Insurance Fraud.

Most contractors are honest. But dishonest contractors are a growing problem in many communities. In fact, home-contractor fraud ranks 3rd among consumer complaints, says the Consumer Federation of America.

Many dishonest contractors are unlicensed drifters who knock on your door and promise to do quality work on your roof, driveway or siding. The work may be fraudulent, and trusting seniors often are targeted.

Especially, watch out for shady operators after heavy storms.

Crooked contractors may demand a large downpayment, then disappear with your money after doing little or no work. Or the repairs are shoddy, using substandard material. Con artists also may try to inflate their fees: They lie that your home is more damaged than it really is.

Some con artists even cause more damage to your home, like enlarging a hole in your roof.

Often you're left with a worse repair headache than when you started -- and no guarantee that your insurance policy will cover fraudulent repairs.

Here are eight ways to find the right contractor and avoid costly fraud:

  • Ask your insurance company for the names of reputable contractors.
  • Obtain bids from three contractors, with references.
  • Have your insurer inspect the damage, before work begins.
  • Get a signed repair contract.
  • Never make a large downpayment; 20 percent should be the max.
  • Pay by check or credit - not cash.
  • Be sure the contractor is licensed.
  • Avoid contractors who go door-to-door.

Your home should be your castle, not a crooked contractor's piggybank.