Home Renovation Scams and How to Avoid Them

Trista - October 31, 2021
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25. Do Not Pay The Full Price Upfront.

Many scam artists will lowball you a deal that seems too good to be true — because, of course, it is. However, they will then say that you have to pay the total price upfront for them to begin working. According to the Federal Trade Commission, many states have a set limit on how much a contractor can request as a down payment. A repair person requesting everything upfront is probably not in compliance with regulations and is hoping you are not aware of this limit. Though the practice is illegal, many contractors request much money from a new job to complete another job. Only make the final payment when the repair work is complete, and you are fully satisfied with it. 

A similar red flag is that the scam artist will say that they only accept cash or check. The reason may very well be that credit card companies have blocked this individual from receiving payments. Why? Because of a history of fraud. Plus, in this day and age, just about any company should be set up so that it can receive a credit card payment. When in doubt, check the Better Business Bureau. That way, you can see if this individual has a history of fraud and scams. Check the the purported company that they claim to represent, too. When sure, make a report to help protect other people from a similar scam.

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24. Say No To Door-To-Door Sales.

Way back in the day, insurance salespeople often went door-to-door to sell policies and collect premiums. Furthermore, in the movie Edward Scissorhands, one of the main characters is an Avon representative who goes door-to-door to sell her products. You may even have memories of going door-to-door to sell items in a fundraiser for your school when you were small. Nevertheless, today, going door-to-door is a huge red flag that something is amiss. If you notice someone going door-to-door and offering to do home repairs, you can bet your bottom dollar that the person is trying to scam people. Literally, because if you fall for the scam, the mistake could end up costing you your bottom dollar.

According to MyMove.com, a door-to-door solicitor is almost certainly a scam artist. These scammers tend to come out in droves after a large-scale disaster, such as a hurricane or tornado, so be cautious and advise your family and friends not to open the door. If someone comes to your front door offering to do home repairs, politely decline and close the door. If the person is insistent, politely offer to call the police. Even if the person is driving a van that appears to have a legitimate logo, do not fall for the repair job. Afterward, call your neighbors and warn them about the repair person going door-to-door. After all, the best way to protect yourself is to surround yourself with people looking out for you, so make sure you are building that kind of culture in your neighborhood. Maybe this scam artist will get the message that they are not welcome in your community.

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23. To Avoid Scams, Shop Around For Repair Jobs.

You need to shop around. That means if you are buying insurance, looking for a doctor, or even checking around for a car. It is the best way to get a good deal and find exceptional service. Look through the listings of local services and check online to see what the reviews are. Call people nearby and ask for recommendations to their providers of choice. People generally do not try to help companies with poor service records get more customers. You can almost guarantee that any recommendation that you get will be a good one. Your home is no different; if you do need a repair job, shop around to make sure you are getting the best service possible at the best price. Plus, that you are not falling for a scam!

According to the Federal Trade Commission, the best way to avoid a scam artist is to shop around. If you hear an ad on the radio for a local repair service offering a particular repair job, check with the Better Business Bureau. Ask friends and family nearby to see if the company holds water. Call multiple companies and ask for quotes. If you let the representatives you talk to know that you are shopping around, they may offer lower quotes. Please make sure the repair people they send out understand that you are serious. Furthermore, they had better do a good job. Did you find a good home repair company that you trust? Be sure to spread the word to help other people from falling for home repair scams.

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22. Say No To Chimney Sweep Scams.

Many people grew up watching the Disney classic Mary Poppins and danced all over the house when all of the chimney sweeps got onto the rooftops of London together to do a song and dance number. Chimney sweeps may not dress all in black and cover their faces in soot before singing and dancing together. However, many people still use them to help keep their chimneys in good condition. These helpful individuals clean all of the ash and soot that can build up in a chimney and cause it not to be as efficient as it could be. According to Rockford Register Star, the problem is that some chimney sweeps can also be expert scam artists.

A chimney sweep scam goes something like this. A scam artist disguised as a chimney sweep will call you or come to your home. They will convince you that your chimney needs to be swept to be in its best shape. From there, the fraudster will attempt to convince you that you need expensive — and unnecessary — repairs. Of course, they will be kind enough to provide them. You can bet that any money you pay up-front for those repairs will be lost. Too bad you can’t have Bert from Mary Poppins sweep your chimney and give you some complimentary entertainment! To avoid falling prey to this kind of scam, always look for a recommendation from someone else in the community. Alternatively, find a chimney sweep whom the Better Business Bureau has verified.

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21. Never Pull A Contractor’s Permits.

One way to make sure that the repair person who is offering to work on your house is legitimate is to check their permits. An unscrupulous contractor may try to convince you that you should review the permits yourself, that you can even save money by doing so, but according to MyMove.com, you should never, ever check the permits. Why? Because whoever pulls the permits from the databases is the person who is responsible for the repair work. If the contractor is the one to pull the permits, then the contractor is liable if the repair work ends up being lousy. 

Many other responsibilities are associated with the permits. Based on your state and local laws, these responsibilities can include worker’s compensation, disability insurance, employee wages, and even having to register with state and local authorities. You should not be bothering with any of those things when you are the one paying the contractor to do the work! Always ask the contractor to pull the permits before you show any money or sign any agreements. Moreover, if the contractor advises you to, take that refusal as a red flag. Their permits and licenses may be revoked. Politely offer to report this person to the Better Business Bureau and move on to the next company.

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20. Make Sure The Contractor Works Under Their Own Name.

One trick that some unscrupulous repair people try to pull is working without a license or permit because theirs were revoked. Instead of repair people, they might be better known as disrepair people because their work can leave your home in worse shape than when they started. According to MyMove.com, another trick is trying to use someone else’s name, perhaps even using someone else’s license. You have to be pretty savvy and be looking for red flags to spot this one, and even if you see a problem, the contractor — who has no morals and is trying to swindle you — will try to convince you that doing so is standard practice in the industry. But before you fall for that baloney, ask yourself, If I was a traffic officer and stopped someone who tried to give me someone else’s license, what would I do?

You would probably send that person to jail! So why would you try to take that nonsense from someone you are hiring to work on your home? Anyone trying to pass off a fake license and use a license with someone else’s name is up to no good. Plus, they are not qualified to do the kind of work on your home that you need. Do your research on the contractor before you sign any paperwork. Verify the license number. Make sure that the names add up. Before letting this person into your home, use some common sense and ask for a photo ID. Better yet, ask for a referral from someone that a trusted friend or family member has used. 

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19. A Lowball Offer, Followed By Requests For More Money, Is A Huge Red Flag.

How many times have you set out to do something, thinking it would cost a certain amount? Then you find that what you had in mind would cost a lot more than you anticipated! Keep that experience in mind. Why? Because if you have a contractor working on your home who asks for more money, you may be tempted to chalk the request up to unexpected expenses. Don’t do that! According to MyMove.com, asking for more money to complete a home project is a big red flag. Some unscrupulous contractors will lowball you on purpose to get you to sign the paperwork, knowing that they will need more money as they get to work on the project. Others go so far as to contract their job out to somebody else for less than what you are paying them. Then they pocket the remainder. In other words, they basically act as middlemen to find someone who will work for less to make a profit.

Whatever the case may be, if a contractor working on your home asks for more money partway through the project, you need to have your laser-vision glasses and get ready to ask many questions. Ask for a balance sheet so that you can see exactly where all the money is going. If you have someone in the know, check and see if you can get a second opinion before you agree to hand over more money. Furthermore, if you decide to pay more to wrap up the job, protect yourself by revising the original contract with a Change Order. The Change Order should stipulate why the contractor needs the extra funds. For additional protection, have someone notarize the Change Order. Plenty of people are willing to fork over the extra money to get the job done and the contractor out of their home. However, due diligence can help prevent these problems from arising in the first place.

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18. Lying In The Gutters.

Rain gutters are a vital part of homes that control how water flows off of the roof when rain falls. Without rain gutters that are working correctly, you can have tons of problems. Water can flow off the roof in a way that drenches people standing outside. Even worse, it can seep into the walls of the building and cause structural damage. One crucial part of making sure that rain gutters are working properly is to keep them clean. Debris such as leaves, sticks, rocks, and other objects can build up in them and cause a blockage. Many people undertake to clean their rain gutters themselves once a year. However, not everyone is physically able to complete this physically intensive chore. This is where scam artists come in, according to Rockford Register Star.

Elderly or disabled people who live alone are prime targets for scam artists. These scammers go to the person’s house and offer their services to clean the rain gutters. Does this elderly or disabled people have a friend or family member who comes by regularly to help with this kind of work? If not, they may need to pay someone to do it. That means they could fall prey to the scam. The scammer charges an exorbitant fee but ultimately does shoddy and incomplete work. What’s worse is it can actually damage the gutters rather than keep them working as they should. Moral of the story? If you can, check in on your neighbors who may not be physically able to complete these kinds of chores. Furthermore, offer to help as a volunteer. If you feel that you may be susceptible to this kind of scam, call a trustworthy friend or family member. They can help you out or hire a reputable company in the area.

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17. Offering A Same-Day Discount Is A Huge Red Flag.

Are you familiar with the feeling of going into a store, only to find that there is a massive sale that ends in just a few hours? You can get what you want at a considerable discount, but only if you make the purchase right away. There are flash sales online based on the idea that if you can get people to make an impulse purchase right now, they are more likely to seal the deal instead of shopping around for better quality. The thing is, you just might be much better off if you skip the flash sale and do your due diligence by shopping around. The practice can really come in handy if you are trying to get a contractor to do some work around your home because many contractors try to create the same mindset in potential customers.

According to MyMove.com, many contractors will offer you a fantastic, once-in-a-lifetime deal, but only if you sign the dotted line today, preferably while talking with the person. Don’t! One problem is that this person is trying to prevent you from doing your due diligence. If you take the time to shop around or do your research on this contractor’s license and reputation, you may find that the deal is not nearly as good as they want you to think that it is. You could be signing an agreement with someone whose license has been revoked for a price that actually could be beaten. Moreover, if that price can’t be beaten, well, that is another problem. There is a solid chance that this contractor will approach you partway through the project to request more money.

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16. Watch Out For Vague Language In A Contract.

When you were in elementary school and had to answer True/False questions, did you ever try to make the T look as close to an F as possible? The idea was that if you could be vague, then maybe the teacher would miss that you were trying to write both a T and F simultaneously. You would automatically get the question correct. Alas, many teachers were aware of this little scheme before you attempted it. Furthermore, concerning finding a reliable contractor and avoiding any kind of home renovation scam, you need to be the teacher fully aware of the contractor’s attempt to be as vague as possible. Don’t let anything miss your eye. Don’t let the T pass for an F.

According to MyMove.com, a pretty standard move among unscrupulous contractors is to make the language in a contract as vague as possible, with the hope that you will not ask for anything more specific. The contractor will leave off some critical details, anticipating that you will not notice. When work has begun, and you realize that crucial things are being left out, the contractor will usually tell you that you can add those details — for an extra cost. Insist on getting clear and specific language in the contract before you sign anything. Ensure that all details are included, down to the specs of the different items that need to be ordered.

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15. Cleaning Your Home’s Duct Work Is A Scammer’s Delight.

Many homes have heating and cooling ducts that allow forced air to flow through the house. It cools the house off during the hot summer months and heats it during the winter. With all that forced air coming through, along with it comes dust and particulate matter. You may think that getting your ducts cleaned regularly is a good idea. Add in that condensed water can be a breeding ground for bacteria and mold. With that being said, you may already be picking up the phone to call someone to get your ducts cleaned. However, before you do, consider that the Environmental Protection Agency said. Apparently, the jury is out as to whether or not having your home’s air ducts cleaned provides any health benefits. 

The document says, “Duct cleaning has never been shown to prevent health problems. Neither do studies conclusively demonstrate that particle (e.g., dust) levels in homes increase because of dirty air ducts. Much of the dirt in air ducts adheres to duct surfaces and does not necessarily enter the living space. It is important to keep in mind that dirty air ducts are only one of many possible sources of particles present in homes. Pollutants that enter the home outdoors and indoor activities such as cooking, cleaning, smoking, or just moving around can cause greater exposure to contaminants than dirty air ducts. Moreover, there is no evidence that a light amount of household dust or other particulate matter in air ducts poses any risk to your health.”

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14. What Does This Scam Mean For You And Your Home Renovations?

Of course, according to Rockford Register Star, scammers do not want to be aware of this scientifically valid information. They would much rather convince you that the build-up in your air ducts harms your family’s health. They may advertise on the radio or even come up to your door with the offer to clean your air ducts so that your whole family can breathe easier and more cleanly. If you fall prey to this scam and ask them to do the work, they will likely overcharge you and may even damage your home’s ducts. The result could be water condensation dripping into the walls and causing structural damage.

What can you do to avoid this home renovation scam? After all, nobody wants to waste time and money to a fraudulent lazy liar! If you are concerned about the air quality in your home, invest in a good air purifier that will help get rid of particulates from all sources, not only from your air ducts. There are numerous brands and types available at local department stores. Do a little research about air purifiers so you can breathe better and save your cash.

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13. Watch Out For Low Bids. It Could Be A Scam!

Common wisdom says to go with the cheapest option. However, there is a reason for the adage that if something sounds too good to be true, it usually is. You may think that you are getting a great deal by paying two dollars for a skirt that ordinarily costs $100. That is, until you realize that there is a massive rip in the back and the zipper is missing. Then you find that you wasted two dollars! The mangoes marked half off at the grocery store may look appealing. That is, until you squeeze one and find it rotted. Cheaper is not always better. Sometimes, more affordable is straight-up rotten. According to MyMove.com, the same concept applies to contractors who are trying to scam you. 

An example is a contractor coming in to give you a quote for the work you want to do on your home. They may then scratch a number — a pretty low number, compared to the other quotes you may have gotten — down on the back of a business card and hand it to you. Do not fall for this trick! If you want a solid quote for the work that you need to do, you need a detailed, itemized quote. That way, it that will not actually cost you more money down the road. There needs to be an estimate of hours, cost per hour, the different parts needed, everything required to get the job done. Otherwise, when you sign the dotted line, you will be signing away both your bank account and the structural integrity of your home.

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12. The Mother Of All Scams Ends With A Loan Against Your Home.

According to the Federal Trade Commission, some of the most wicked contractors will try to scam you out of your home itself. The scam goes something like this. The person will approach you with the offer to do a home renovation project, such as putting a new roof on your house to get those solar panels you have wanted to install. The only problem is that you were not planning on this project and did not have the funds. Never fear because the contractors know a lender who will be more than happy to offer you a great deal on financing. Oh, surprise, the lender is actually in the neighborhood and has the paperwork for you to sign.

The paperwork for financing may not have been filled in, and the contractor and lender may rush you to sign without reading it carefully. They do not want you to know that the paperwork for financing is a loan against your home, and once you sign it, you will have very few options. The contractor will do very shoddy work that could actually damage the structural integrity of your home. You will be left with much more than a bill paying for those “services.” If you do not come up with the money right away to pay the contractor, you could end up losing your home. 

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11. How Can You Avoid This Costly Home Scam?

To avoid this scam, as with any other fraud, make sure you do your due diligence. NEVER allow a contractor to approach you and convince you that they will do quality work on repairs that you desperately need. That goes double if you were not even aware that you needed these repairs. ALWAYS shop around, and ALWAYS read the contract thoroughly. If you need to arrange to finance, make sure that you do so on your own.

Why? Don’t allow a contractor to introduce you to their partner in crime. They could be setting you up with another scam artist! Use the bank you trust because the people there will be aware of red flags that could cause the bank to lose money on the renovation job. That way, you can have peace of mind knowing you are making smart decisions with your money and your home. Keep reading to learn about how you can avoid car scams, too.

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10. Buyer, Beware Of Flooded Cars.

This one may not be a home repair scam. However, if you accidentally end up with a flooded car, you will end up with a flood of car repairs. In turn, it could derail your budget for what you need to do to keep up with your house. A flooded car has gone underwater, such as in a hurricane that flooded a populated area or a river overflowed its banks. When water gets into the car’s mechanical parts, it causes corrosion. Over time, it can ruin all of the electronic components. The damage may take years to appear. Nevertheless, it is irreversible and will turn the car into a lemon. Mold on the car’s furnishings may not be visible at first, but it will take over and could make everyone riding in it sick. 

According to Consumer Reports, the unprecedented hurricanes of 2021 led to hundreds of thousands of cars being flooded and hundreds of thousands of flooded cars already on the roads. Don’t think that you don’t need to worry about buying a flooded car just because you don’t live in hurricane country. They have usually transported far away before being sold. How do you spot a flooded car before you inadvertently buy it? Keep reading for more information that can help you avoid this costly scam.

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9. Here’s How To Spot A Flooded Car Before Wasting Your Money.

Vigilance is key in every aspect of purchasing a vehicle. Paying attention to the front end before you sign the paperwork can prevent problems on the back end after you already have the car in your possession and are responsible for payments. A flooded car is given a new “salvage” title. However, the marking that indicates this can be very plain or even obscure. Why? Because some states require a letter or number code.

What should you do before you sign the paperwork for your new car? Call your insurance company to ensure the car can be added to your policy. The insurer will identify very quickly if the vehicle has been flooded and will say so. After all, the insurance company wants to keep its costs down and may do so by refusing to insure a salvaged car.

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8. The Contractor Should Order All The Materials For The Job.

Ordering new materials can be expensive, and let’s just face the facts: home renovation projects are not cheap. Owning a home is not cheap. However, doing your homework now and making sure that you are buying quality materials for your project can save you a lot of money down the road. Heck, it could even protect the structural integrity of your home! According to AARP, a big red flag for a home renovation scam is that the contractor offers to use surplus materials from a previous job. You may not want those surplus materials to go to waste, but a good and reliable contractor will only order necessary.

A contractor with surplus materials likely over-billed the previous client and ordered unnecessary materials. This situation is not one of “his loss is my gain.” No, his loss is a sign that you need to stay away from this contractor! Surplus materials could also mean that the contractor did not even finish the previous job. And again, there is the genuine possibility that the scammer is trying to get you to sign a contract without reading the fine print. After all, there is a limited amount of surplus materials available, and you want to make sure that they go to you. 

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7. Do This If You Want To Save Money On Materials, Instead.

If you want to save money on materials, look for a surplus or salvage store. You can get suitable quality materials at a pretty low price and without the red flag of a contractor just happening to have surplus materials. Just make sure that you are not falling for another scam! Make sure that the surplus store you are going to has a good reputation, and check the quality of the materials yourself.

If the wood looks like it has been used previously, it probably has. If the nails are crooked, they were perhaps pulled out to be re-used. Make sure that you go for quality over price to save yourself numerous headaches down the road. Keep reading for more details about home renovation scams. Our experts understand what red flags to look out for. Not only that, but ways you can avoid losing money and your complete hope for the future.

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6. Do Not Take The Contractor’s Word For Anything.

You may think that scams only happen online nowadays, but there are still plenty of people who go door-to-door. They may have the cliché glistening smile that is supposed to convince you of integrity and good intentions, and the handshake from roughened hands may be convincing that this person really is the one for the job. But be aware that scams still happen door-to-door, and your job is to protect yourself, your family, and your home. So make sure that you absolutely do not ever fall for the trick of the person looking you in the eye and telling you, “Take my word. I wouldn’t lie to you.” 

This is one of the oldest tricks in the book. The idea is to win you over with charisma so that you will automatically be inclined to sign the dotted line and hand over the money. Nevertheless, according to OppLoans, lawyers have a reason for wanting everything in writing: because you cannot just take people’s words for anything. This is not to induce cynicism and insist that you cannot trust people. You cannot trust people you just met yet insist that they are 100% believable and act with integrity.

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5. Do Not Trust Anyone Immediately.

To follow up with the last item, you shouldn’t trust people you just met. That goes for both business and pleasure. In this case, trusting a contractor right away can cost you hundreds to thousands of dollars. Not only that, it will waste your time, energy, and only add to an already stressful situation. So what should you look out for when it comes to home renovation scams? The scam begins with the would-be contractor telling you what work they can do on your home.

You add in some of your own ideas, and the contractor nods enthusiastically. Yes, all of your ideas will be implemented! Those ideas are not in the contract that you sign, but no worries. You had such a clear verbal understanding with each other — you took the contractor’s word — that those details were completely missing. The problem is that if a lawyer has to get involved, they will not give two cents about anyone’s word. All that matters is what is in writing. The contractor will say that those details were not included in the contract and will cost you extra if you still want them. The lawyer will have no choice but to agree.

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4. Do Not Pay With Cash.

As previously mentioned, if you are dealing with a contractor who insists on only taking cash or check, just say no. Credit card companies may have blocked them from engaging in unethical business practices. You also do not want to work with a contractor who insists on a substantial down payment. According to the Federal Trade Commission, the safest way to pay for any home renovation project is through a credit card. People cannot trace cash payments. If the whole home renovation project ends up falling flat, you will have few options for justice if you pay in cash. Checks offer slight protection. Of course, that is only to the extent that you can cancel the check before the scammer cashes it.

However, credit card companies are very adept at tracing where their credit cards are being used and the reputation of the company or individual receiving the payment. If they report that a particular proprietor acts with poor ethics, they can stop all future payments to that entity. They also can offer options in case there are problems with the quality of the work. Putting money on your credit card instead of shady financial institutions can also prevent any financing scams. Again, if the contractor tells you not to bother using your credit card or acts confused when the credit card company declines to process the payment, take that as a clear sign that you do not want this person inside your home.

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3. Do Not Believe A Shiny Printed Flyer.

You may see a flyer in the mail, on your car’s windshield, or placed on your front door, advertising the services of a contractor in the area. Flyers lend an air of credibility, but it is a false one. The temptation is to believe that only a reputable company would be able to get flyers designed, printed, and distributed, but nothing could be farther from the truth. Anyone can use a design program on the computer to create flyers and then have them printed. Anyone can get a logo made and copyright that logo. According to HomeAdvisor, you should be wary of any home improvement offer that you learn about through a flyer.

Likewise, anyone can take out an ad in the phone book, but the phone book requires something that a flyer does not: an address. While an address does not provide foolproof protection, it is at least somewhat traceable. Radio ads can also be sketchy. The station’s producer may require some kind of proof that this proprietor is legitimate before advertising; there is no guarantee. You may be getting the impression that finding a good contractor who will not scam you is hard. Yes, you are correct. But again, you want to look for contractors who have a solid reputation in the community. If someone cannot recommend a contractor that they used, you can guarantee that person had a bad experience with this contractor. 

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2. Leave Honest Online Reviews About Scams.

The best protection against scams is communal protection when you and the people in your community are actively working to keep each other safe. So make sure that you play your part in protecting your friends, family, and neighbors from home renovation scams. Did you find a good home renovation company or independent contractor? They did solid work on your house without any financial mishaps. There was nothing about needing extra funds partway through the project or providing a grossly misleading quote. If that is the case, let people know.

Was everything done on time and of the best quality possible? Share on social media by posting reviews on websites like Twitter. Even better, sites such as Yelp and Google for direct reviews. If the contract has a Facebook business page, make sure you comment. Spare people the pain of losing their shirts in a home renovation scam by letting them know whom to work with.

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1. Spread the Good Word.

Likewise, did you come across a fraudulent contractor who was basically running a big scam? Even if you did not sign the paperwork, let people know that this shyster does not have any success. Hopefully, the neighborhood can run them out of town. Do you see someone going door to door in your neighborhood? Are you sure that this person is a fraudulent contractor running a massive home renovation scam? Start calling your neighbors to let them know what is happening. Better yet, call the police and inform them that a suspicious individual is canvassing your neighborhood. If you are concerned about the term “suspicious” being a bit too overbearing, keep in mind that running scams are illegal. Public safety requires that scam artists be apprehended, preferably before they fool the next person.

Did you hear a radio station playing an ad for a contractor that you know is corrupt? Give the station a call or send an email to inform the staff there of what you know. Radio stations do not want to be advertising for businesses that may do a disservice to their listeners. They just may take your words to heart and stop advertising for fraudulent companies. Employ the power of social media by posting first-hand accounts on the internet. People who are considering working with a particular company may see your negative review and think better. Also, make a report to the Better Business Bureau. The BBB may not take legislative action. However, the agency can report on its website not to work with a particular contractor.

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