How To Spot A Crooked Contractor

5 Tips To Avoid Being Scammed

If you're in need of a contractor or service company for repairs orimprovements, you've, no doubt, considered the possibility of hiring the wrongguy and ending up with a poor quality job or losing your money to a crook. Unfortunately, your fears are well grounded. There are more bad ones than there are good.However, the reality is; most people become victims of scams because they didn'tfollow common sense practices that they knew they should have. I don't mean thatto sound like criticism. The fact is; I've been guilty of it too. It's easy tobecome to relaxed or comfortable and just skip the formalities of business. Theproblem is; con artists know this and they're often good natured, folksy typeswho can put us at ease and get us to let down our guard. I've put together alist of 5 steps that, if taken, will go a long way in helping you avoid mistakeswhen hiring contractors.

• Check Them Out-You already knew this one. We all do. But, be honest, how often do you do it? I was a contractor for years and did hundreds of thousands of dollars worth of work, a lot of it for people who didn't know me at all, and I know of only one or two times that anyone checked my references or background. On the other side of the coin, I've several companies to do work on my own home and made the same mistake. Regretfully, one of those instances cost me a lot of money and headaches. Ask for references, then call and verify them, and ask specific questions about the things that are important to you in a business relationship. Call the BBB or your local chamber of commerce to see if any local complaints have been filed. These days if someone is ripping people off, chances are you can find something about it in an online forum.
• Make Sure They Have A Real Address-When you do business with someone, it's important that you know how and where to locate them. If a contractor or business doesn't have a physical address on their proposal form or business card or if it's only a P.O. Box, this should raise a red flag. Many small business owners operate out of their home and that's perfectly legitimate. But, if they're hiding their address, you have to wonder what else they might be hiding.
• Get A Price In Writing-Signing a contract or authorization without a written price is like giving someone a blank check. There may be instances when someone quotes you an initial service charge or diagnostic fee, but the agreement should stipulate that you are to give a second authorization after receiving a repair price. If you don't have something in writing, you are completely at their mercy.
• Read Before Signing-This is probably the oldest rule of thumb in business. But, at one time or another, most of us have failed to do it. Whether it's credit card agreements, a new car purchase, or a home improvement contract, at some point we get comfortable, or just lazy, and we just sign without reading the fine print. Then, many times, we end up kicking ourselves later. Take the time to carefully read every word of the agreement and if you don't understand something, do some research. In cases involving large sums of money, you may want to consult an attorney. Don't let a salesman pressure you into making a bad decision. 
• Be Careful With Up Front Payments-It's now pretty common for contractors to ask for a deposit or down payment at the beginning of a project and if you've done your homework and checked them out this is generally a safe thing to do. However, you've got to be careful about the amount and the timing. On a job of $5,000 or less, 50% up front and the balance at completion is probably OK. On larger amounts, I would try to keep it at 25% or below, then make progress payments as the work is completed. I would never give someone a deposit to give me a spot on their schedule. This is a good way for them to string out endless delays or to never show at all. There is no logical reason that they need any of your money before they show up to start working.

If you follow these steps, as well as other common sense rules of business,you should make wiser decisions and avoid troubles. I've put together a manualfor managing home improvement projects that includes questionnaires forinterviewing contractors and checking references, as well as sample contractsand other documents. Check out my DoIt Yourself Contractor Kit .