You’re ready to tackle your next home improvement project, and all you need is a contractor to take on the job. While it may be convenient to use the contractor who left a flyer at your door, homeowners should use caution when choosing a contractor to avoid getting caught in a scam.
Home improvement scams are on the rise—in 2021, the median loss from home improvement scams was $1,700. Scams also tend to increase following a weather event or during the warmer months. Before you sign any contracts or checks, keep these 10 common cons in mind to avoid becoming a victim of a home improvement scam.
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1. Deposit Scam
In this situation, the contractor will ask for payment upfront (usually cash) before beginning work. Then, the contractor disappears and never completes the project. Many legitimate contractors may ask for a 10 percent to 30 percent deposit at the start of a project, but never the full amount. Some states even limit the amount of money a contractor can ask for as a down payment.
Asking for cash can be another red flag of a scam. Be extra careful depositing cash, since it is less protected than a credit card or check payment.
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2. Insurance Scam
This trick is common after a big storm or natural disaster that damages homes in the area. Scammers will visit homes affected by the weather and offer their services to fix the damage. The scammers say they will handle the insurance claim and payment for the homeowner, which is a common situation for legitimate contractors.
Then, the scammers pocket the insurance