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5 Tips to Protect Yourself from a Home Improvement Scam

Posted by: Anna | 07/29/2015 at 11:09 AM


5 Tips to Protect Yourself from a Home Improvement Scam

Many Ambit Energy Customers and Consultants hire contractors for renovation projects during the summer, but you need to be cautious as you research contractors and know the red flags of a potential home improvement scam. Unfortunately, home improvement scams rise during the summer because con artists know that more homeowners will want renovations done around the house while the weather is warm. There are fraudulent contractors who prey on homeowners and they wind up performing poor or incomplete work, and in some cases, none at all.

Home improvement projects are undoubtedly an investment. According to the U.S. Census Bureau, homeowners pay more than $3,000 a year on renovations, which makes it all the more important for you to create a plan and follow the tips below before picking a contractor. It’s critical that you know the signs of a home improvement scam. See below for some tips Ambit Energy provides on how to spot a home improvement scam.

  1. Don’t pre-pay for work. Scam artists will often want homeowners to pay for work in advance. Remember that a valid contractor will send you a cost estimate and you will only pay when work has been completed to your satisfaction, or you may pay for materials only as work proceeds. A legitimate home remodeling business will understand if you want to get estimates from other companies as well as do your own research.
  2. Research home remodeling companies. Obtain the following pieces of information about a contractor: tax ID number, business license, permanent address, website and phone number. You can also ask the company for references and previous customers about projects they completed.
  3. Request a written contract. Ask the contractor to draw up a contract that contains details such as a project description, warranties, payment schedule and expected completion date.
  4. Beware of unsolicited visits regarding home repairs. Scammers will unexpectedly knock on residential doors and point out potential problems that can be fixed at a seemingly good price. For instance, if a person suddenly shows up at your door offering to paint your house or fix your roof, then you need to be cautious. Don’t consent to a job on the spot without doing your research and requesting a contract as discussed above.
  5. Review insurance coverage. Request to see a copy of the company’s liability coverage. It’s important to remember that homeowners could be liable for an accident that occurs if a home remodeling company isn’t properly insured.

Resources for Hiring a Legitimate Contractor

If you’re considering hiring a home remodeling contractor, we hope you’ll remember these helpful tips. Scam home improvement cons are something we want to prevent for our loyal Customers and everyone else.

We also recommend that you visit the Federal Trade Commission website. The agency provides an excellent online guide that covers different aspects of hiring a contractor that need to be considered in order to protect yourself. Many states also mandate that contractors be licensed. You can learn the licensing requirements in your area by contacting your local consumer protection agency, which can be found on the USA.gov website.

With any investment, it’s important to do your research and take your time in making a decision. And when it comes to your house, you want to be cautious about who you hire to perform home improvements in order to avoid a costly disaster.


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