Consumer Information

Ten Contractor Scam Warning Signs

Here are a few things to watch for when you first come in contact with contractors.

Warning Sign 1: Scare tactics
"Well, your chimney looks about ready to fall over. If that lands on someone's head -- they're a goner. And you could have one dandy lawsuit."

If a contractor tries to literally "scare up" your business, avoid him. Even if the repair is of an urgent nature, an honest operator will not use gloom and doom to get your business. At most, he or she might simply point out the possible outcome of a neglected repair. For example: "Your roof could develop some leaks within the next year" is a realistic professional judgment. However, "Your roof is about to cave in any minute" is a flagrant scare tactic.

Warning Sign 2: The hasty quote on a big job
"I figure $5,800 should do it," says the contractor as he glances at the complicated repair, then quickly scribbles a number on a scrap of paper.

When making a bid for your business, legitimate contractors do not scribble on scraps of paper or offer verbal quotes. They provide detailed quotes.

The exception to this might be a quote given in answer to a casual inquiry or for a very small, basic repair for which there is a standard rate. Otherwise, a repair contractor should thoroughly examine the problem and provide a written breakdown of the cost for labor and parts.

Warning Sign 3: No identification
"Sorry. I forgot my business cards. You can always look us up at our post office box address."

Legitimate contractors present themselves in a professional manner. They have business cards and an established street address -- not a post office box -- where they conduct their business. In an industry of many small independents, that street address might also be their home. That's OK. Self-employed people often work from a home office. What's important is that you know where to locate them if anything goes wrong. Be cautious of anyone who cannot produce identification. They could be transient operators -- people who work over an area, then disappear.

To see the entire article and all 10 warning signs, visit the Motley Fool website.

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