Avoiding Contractor Scams In Natural Disasters
Last updated on 05/24/2021 at 7:15 pm
One of the unfortunate side effects of a natural disaster is the increase in contractor scams. This is where unlicensed persons canvas the neighborhoods and offer deals that seem too good to be true to repair your damaged home or property. All too often, the money is paid but the work is never done. Be very careful before hiring a contractor that you have not used previously.
What Is a Home Improvement Scam?
Scam artists target homeowners in a variety of ways, including:
- Identifying potential victims by scouting out neighborhoods after natural disasters and then targeting vulnerable victims
- Using high-pressure tactics to sell a range of services, including house, roof, sidewalk and driveway repairs
- Charging inflated prices
- Delivering sub-standard work
- Posing as a building inspector or other official so they can demand immediate repairs
- Obtaining funds to pay for services by urging the homeowner to work with a certain lender
How Do You Spot a Scam Artist?
Scam artists posing as contractors will often:
- Work door-to-door
- Imply that they are working on other homes in your neighborhood
- Imply that they are from the bank or insurance company
- Fail to provide contact information, such as a contractor’s license, business card or other identification
- Use a post office address or out-of-area telephone number
- Drive vehicles with out-of-state license plates
How Do Fraudulent Contractors Operate?
A scam artist posing as a contractor acts quickly and wants you to do the same thing. They generally talk in terms of cash-only deals, verbal agreements and insist on payment up front. You should always be suspicious of anyone who:
- Pressures you for an immediate decision
- Offers to make on-the-spot repairs or “special deals”
- Refuses to offer a written bid or contract
- Submits extremely low bids
- Only accepts cash
- Requires a large cash deposit or asks for the full amount up front
- Offers to finance the costs
- Suggests that you borrow money from a person or lender they know.
Who Oversees Contractors in West Virginia?
The West Virginia Division of Labor Contractor Licensing Board licenses all contractors in the state of West Virginia. The Board verifies contractor licenses and issues cease & desist orders to unlicensed contractors. Inspectors also work with contractors to obtain required licenses and investigate job sites in the state to ensure the legal status of workers. If a contractor holds a legitimate license, that ensures that the contractor has taken the necessary steps to meet all state regulatory requirements. In addition, the Contractor Licensing Board will have all information on the contractor and will have a way to reach the contractor if you have a complaint or a dispute arises.
You can call the Division of Labor to verify if a contractor has a West Virginia license, whether the license is in effect and whether it is a limited license (for example, some contractors are licensed to build decks, but not do roof repair; others work on roofs but are not licensed to do plumbing.)
You also can visit the Division of Labor website and use its search engine to look for a contractor and determine if the contractor is legally licensed:
West Virginia Division of Labor
State Capitol Complex
Building 6, Room 749-B
Charleston, WV 25305
What Should You Require from Your Contractor?
Legitimate contractors will not hesitate to give you any information that you want. Do not hesitate to ask for the following:
- A copy of their contractor’s license from the West Virginia Division of Labor. West Virginia requires that all contractors be licensed. The license should include:
- The current name and address.
- The date issued
- A six-digit license number preceded by letters “WV”
- Ask for at least three (3) bids.
- Use the same specifications, materials and labor for each bid.
- If you get a bid that is a lot less than the others, be suspicious. The contractor might be cutting corners, may not have insurance or may use bad materials.
- Do not assume that the lowest bidder is the best choice. Ask about differences in price for the same types of work.
- Be aware that the contractor may be price gouging with regard to labor or materials. State laws protect consumers from price gouging and unfair pricing practices during and shortly after a state of emergency.
- Ask for at least three (3) references of work the contractor has completed in your area.
- Require a written contract with the contractor’s license number on it.
- Understand the terms of the contract before you sign it!
- Make sure all changes to the contract are also in writing.
- Ask for a copy of the contractor’s liability and Workers’ Compensation coverage certificates. You could be liable for injuries that occur on your property if they do not have this coverage.
- Make sure the contractor knows to get any local permits.
- Ask for cancellation forms.
- If a contractor comes to the house and makes the contract, you have a three-day right to cancel the contract.
- If the contractor ties repairs to amounts covered by insurance for roof damage, there is a five-day right to cancel.
- Ask about any subcontractors, laborers or materials suppliers. If the contractor does not pay them, you could be liable for the wages and materials through a mechanics’ and materialmen’s lien.
What Should I Do Before I Hire the Contractor?
Educate yourself on the contractor’s business, licensing and the quality of his or her work. Become an informed consumer and be prepared before you hire anyone.
- Get referrals from friends, family, neighbors and former customers.
- Check reviews from the Better Business Bureau or other reputable online sources.
- Verify that the contractor is licensed and bonded for damage and theft protection and has liability and worker’s compensation insurance.
- Check with the Division of Labor to see if any complaints have been filed against the contractor.
- Research the company’s on-line reputation.
- Check at the courthouse for criminal history and civil actions against the contractor.
What Should I Do After I Hire the Contractor?
Be sure to protect your interests as the work is being conducted.
- If possible, always make sure someone is at your home while the work is being done.
- Do not leave money or other valuable items (jewelry, laptops, cell phones) in obvious sight while the contractor is working.
- Make sure that the work is being done the way that you want it:
- Take before, during and after pictures of the work as it progresses.
- Keep track of all paperwork (contract, letters, payment records, photographs of work in progress, discussion notes.)
- Ask for written warranties for materials and workmanship.
- Make sure the job site is clean and free of materials and tools.
How Should I Pay the Contractor?
Contractors may ask for an initial deposit or installments as the work progresses, which is permissible. If you agree to such an arrangement:
- Do not finance the repairs through the contractor. Arrange for financing through your own bank or a financial institution that you trust.
- DO NOT PAY IN CASH. Most contractors will take checks or credit cards.
- Do not pay the full cost of the job up front.
- Limit your down payment and agree to pay in installments based on the amount of work completed.
- If you have agreed to pay in installments, do not let payments get ahead of the work completed.
- Do not let the contractor use your credit card or store account.
After the work is completed but before you make the final payment, verify that the work meets the contract requirements and that you are satisfied. If you do not like the way the work was done, ask for changes. Do not accept the job as completed if things are left undone. Once you are satisfied:
- Ask for proof that all of the subcontractors have been paid.
- Make certain building material costs are paid for.
- Always ask for receipts.
What Should I Do If I’ve Been Scammed?
If you feel that you have been scammed or that the contractor has not done the work he or she agreed to do, you can take any or all of the following steps:
- First try to resolve the issue with the contractor. A legitimate contractor will be open to negotiation, especially if they believe you may take legal action.
- Follow up on any phone conversations with a letter, sent by certified mail, and request a return receipt so you have proof it was received.
- If you have a problem with the service or products charged to your credit card and you have made a good-faith effort to resolve the issue, you have the right to contact your credit card company and ask that payment, plus finance or related charges, be withheld on any pending purchases.
- If attempts to reach an agreement fail, contact the Division of Labor, the West Virginia Attorney General Consumer Protection Division or other consumer hotlines.
Where Do I File a Complaint?
West Virginia Division of Labor
State Capitol Complex
Building 6, Room 749-B
Charleston, WV 25305
West Virginia Attorney General
Consumer Protection & Anti-Trust Division
P.O. Box 1789
Charleston, WV 25326
CONSUMER PROTECTION HOTLINE: 1-800-368-8808
Better Business Bureau – www.bbb.org
U.S. Federal Trade Commission – www.ftc.gov
- Get several bids.
- Try to get written bids or estimates from at least 3 different contractors.
- Check out the contractor.
- Get the contractor’s full name, address and phone number.
- Ask for a copy of the contractor’s license.
- Ask for references and call them.
- Check with the West Virginia Division of Labor, the Better Business Bureau and the courthouse for criminal history and civil cases against the contractor.
- Be careful when dealing with contractors who have out-of-state license plates, addresses or telephone numbers.
- Get it in writing.
- Get a written contract.
- Specify the work to be done.
- Specify the price.
- Don’t sign anything you don’t understand.
- Control the money.
- Do not pay for the entire job up front. Minimize the deposit if possible.
- Do not pay the full amount until after the work is finished, you have inspected the work and you are satisfied.
- Do not pay in cash.