In light of the recent severe storms and flooding that have impacted the Central and Northeastern Regions of New York, I wanted to write about some steps individuals and businesses can take to avoid becoming targets of contractor fraud. Whenever natural disasters strike, leaving behind damage to homes and businesses, we will undoubtedly hear stories of individuals who have been further victimized by scammers and con artists.
During these difficult times, people understandably want to get their properties repaired and their lives back to normal as quickly as possible. Add the stress of having to document the damage, getting appraisals, and waiting for insurance carriers to act, and even those who are typically diligent in their selection of service providers can be taken in by fraudsters. So, when seeking contractors or flood repair specialists for your property, it is important to be selective in choosing the right person or company. Below are some simple things that can help you weed out scam artists.
Be cautious of contractors that show up unsolicited. While legitimate, professional contractors will solicit business from victims by going door to door in a disaster area, it is also a common tactic of scammers and fraudsters who will offer fast repairs at cheap prices. Try to get at least three separate estimates for your project to determine an average price for your repairs.
Verify the company information. If a potential contractor indicates that he is affiliated with a specific company, confirm the existence and status of the firm with your state’s division of corporations. If operating under a DBA (doing business as) name, contact the County Clerk’s Office to verify the same.
Check the company website. Once you confirm the existence and status of the company, visit the firm’s website to verify that the contact details and services match those that were provided to you by the contractor. Often times, scammers will present a fake business card with the name of a reputable firm and contact details which will connect you with an accomplice pretending to be a contact at the company.
Verify that the person actually works for the company. After determining the correct contact information, it is a good idea to call the firm directly and verify that the individual does in fact work at the company.
Confirm licensure and certification status. If the individual is claiming to be licensed or certified, ask for a copy of the credentials and check against the records maintained by the appropriate state and/or local licensing authority (visit the official state and county government websites for your jurisdiction to identify the proper agency). When presented with a license that does not contain a photo, ask to compare the personal information to the individual’s driver’s license.
Ask for proof of insurance and workers’ compensation coverage. If the individual claims to be insured, make sure to obtain a copy of the insurance policy for your records. You may also want to contact the insurance carrier directly to confirm that the policy does in fact exist, is in full force, and will cover the work being offered by the contractor. The contractor will also require active workers’ compensation coverage for any employees joining him on the project.
Determine the need for special permits. Before undertaking any temporary or permanent repairs, determine whether you will need to obtain any home improvement or building permits. If so, check that the contractor has obtained the necessary permits before beginning any work.
Get a written estimate and written contract. For your protection, a written estimate and written contract explicitly stating the work to be done should be obtained. Read the estimate and contract carefully and do not sign anything unless you fully understand what is contained in the documentation. Obtain copies for your records.
Check references, customer review websites, and business complaints. Ask the individual to provide the contact information of prior clients and contact them for a reference on recently completed projects. Also, visit ratings and review websites, such as Yelp and Google+ Local, to check for comments left by clients. Finally, contact the Better Business Bureau and your local Chamber of Commerce to see if any customers have lodged complaints against the contractor (similar information can also be obtained from state and county licensing authorities if registration or certification is required).
Confirm that repairs will be reimbursed by your insurance carrier. If repairs will be covered by your insurance, make sure your carrier will cover what the contractor is proposing and verify the carrier’s documentation requirements so you are not stuck with fees that will not be reimbursed under your plan.
Taking advantage of someone who has just lost so much is terrible; but disaster sites will continue to be breeding grounds for these types of schemes. Protect yourself and your family. If you need help verifying credentials or company information, don’t hesitate to contact me directly at (800) 983-0379 or via email at email@example.com and I will be happy to assist any way I can.
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