Eight Red Flags for Contractor Fraud
Have you ever received a phone call, flyer, email, or other communication from a contractor that just seems too good to be true? If it sounds too good to be true, it's likely it is. Spotting contractor fraud can be challenging, but if you know what to look for, you could prevent thieves from taking advantage of you and your loved ones.
Do you know what the red flags are to spot contractor fraud?
Warning Signs of Contractor Fraud:
- Hillsborough County Government does not market or promote third-party contractors. If you're sent something with the County logo or the marketing piece seems out of the ordinary, it's likely false. If you're unsure, you can always call Hillsborough County's Consumer Protection Services at (813) 635-8316 to confirm if it's an official document.
- If the contractor claims there's urgency in making your decision or says, "this price is for one day only," it could be a scam. Collect referrals and do your own research before making any decisions. Contractors should be respectful and let you take time to think about your decision. They also should honor the same price at a later date.
- Is the person talking really fast and almost a little too familiar for comfort? While it may seem polite that they know so much about you and your home, scammers could also be using it as a strategy to gain your confidence to force an uninformed, quick decision.
- If you're about to sign on the dotted line and the contractor tells you that payment can only be made in cash, and they aren't taking any other forms of payment like checks or credit cards, that could imply that they may not be who they say they are. Anything promised to the homeowner by the contractor should be in writing and signed by both parties.
- If a contractor tells you that your cash payments must be made upfront or directly to another contractor or supplier, take a step back - this could be fraud.
- Sometimes you do have to make payments to the contractor in advance to help pay for their materials, but it should never be large amounts of 50% or more. 10% down is normal and should be plenty to cover what they need to get started. If you're the homeowner, do not make any payments until the contractor provides a Partial Release of Lien and Affidavit. The homeowner should not make the final payment until a Final Release of Lien Affidavit is received from the contractor, which ensures subcontractors have been paid off.
- If you receive a work estimate from a contactor that seems too low after comparing them to others, do extra research and collect referrals from other customers to make sure you're selecting the right person for the job. The lowest price does not always guarantee quality.
- While talking with your contractor or doing research, if you find they don't have basic information like their business address or contact information on their estimate, business card, vehicle, or marketing materials, the person may not be who you think they are.
Watch and listen for anything that seems out of the ordinary when selecting and paying for a contractor. Unlicensed contracting is a criminal offense and consumers need to be wary of hiring someone who offers the fastest, cheapest job. Often the results are poor workmanship, inferior materials, and unfinished work. Hillsborough County residents can verify a contractor's license is up-to-date by visiting the website for the Department of Business and Professional Regulation (DBPR) and they can verify local licensing on the Development Services website here.
If you're looking at financing options for your contractor, remember that there are many financing options available. It's important to do your own research and find the best contractor and financing option that's appropriate for your particular financial situation.
If you think you've been a victim of fraud, Hillsborough County's Consumer Protection Services at (813) 635-8316 can help you figure out your next steps.