10 tips to prevent home contractor fraud

How to find a contractor

Whether it's home repairs or remodeling, it's important to find the right home contractor for your specific job. Selecting the right person means choosing someone who is both trustworthy and reliable.

Home contractor fraud happens, especially in the wake of serious natural disasters when damage mitigation is so critical. If you are planning a home repair or home remodeling project, use these 10 tips on how to choose a contractor:

1. Know what you want. Have a basic understanding of what you are hiring the contractor to do. Then, you can look for home contractors who specialize in the types of repairs you need.
2. Ask people you trust. Use your friends, family, co-workers and neighbors to help you find a reliable contractor. Ideally, they'll recommend someone who has already completed work for them.
3. Keep it local. If you work with a local business, you can be sure they have a location, phone number and contact person nearby in case something should happen during the project.
4. Ask for references. Inquire about recently completed projects and ask to visit one of their worksites.
5. Ensure their credibility. Request to see appropriate certificates and permits and check your Better Business Bureau (BBB) for their rating or any complaints they may have received. Google® and Yelp® can provide reviews, too.
6. Use multiple resources. Many states have websites that help you locate licensed home contractors.
7. Know licensing. Make sure you follow the correct licensing regulations within your state and/or municipality. For example, many governmental bodies require residential construction projects, renovations, or new construction to have a licensed construction supervisor on-site.
8. Verify they're insured. Ask for proof of insurance. Look for both Worker's Compensation and Errors and Omissions coverage. If your home contractor does not have adequate insurance, contact your insurance company to find out if you can add a "rider" to your insurance coverage (an amendment to your insurance policy for additional coverage in the event of an emergency).
9. Get written copies. Request the cost of work and the cost of materials as well as the project timeline in writing. Get copies of receipts, too.
10. Know your contractor's schedule. Questions to ask a contractor include: How much time will be spent on your project? When will it be completed?

Be wary if your home contractor has multiple other ongoing projects. Too many and they may not be able to devote enough time and energy to yours. Find out who will be at your home on a daily basis and how you can contact them with questions.

Safe payment options for home contractors

It's okay if the contractor asks for a small down payment for supplies. In fact, it's reasonable to expect to pay part of the cost right away. But, paying in full or paying for work up front is a risk, especially in the wake of a serious natural disaster when damage mitigation is so critical. Obtain the contract before making a payment and carefully review it before signing. The safest payment methods are a cashier's check or credit card.

For more information, or if you think you may be a victim of a home contractor, visit The National Center for the Prevention of Home Improvement Fraud (NCPHIF).

Property damage mitigation

• If you've survived a natural disaster or discovered a needed home repair, take this step when filing a home insurance claim.

Sources

1. Giorgianni, Anthony. "Don't Be a Victim of Home Contractor Fraud - Consumer Reports." ConsumerReports.com. Consumer Reports, 6 May 2014. Web. 03 Apr. 2016. http://www.consumerreports.org.
2. "Consumer Information." Hiring a Contractor. Federal Trade Commission, Mar. 2014. Web. 03 Apr. 2016. https://www.consumer.ftc.gov.