Avoid Home Service Scams with These 7 Tips

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Regular maintenance retains your home’s value and keeps you and your property safe. When you need home service and aren’t confident you can do it yourself, it can save time and frustration to call in a professional.

Most contractors are honest, but hiring the wrong one leaves you vulnerable to shoddy workmanship or even fraud. According to an estimate by the Federal Trade Commission, Americans lost approximately $1.5 billion in 2012 alone to home improvement fraud.

We spoke with professional contractors to find out how to spot home service scams a mile away. Use these seven tips to avoid home service scams.

1. Check Online Reviews

Great online reviews don’t guarantee a good experience, and a lack of reviews doesn’t mean a contractor is unethical. But checking online can help you get a sense of what people liked and disliked about a contractor. 

Larry Patterson, owner of Glass Doctor, recommends you pay attention to how companies with a strong online presence handle negative feedback. “These are established businesses [that] have something to lose. Read some of their poor reviews and see what is said and how the company responds.”

Many people are only inspired to leave reviews when they’ve had a strong positive or negative experience. But even if your service was unremarkable, you can help the business and future customers by writing a review when the job is done.

2. Reject High-Pressure Sales Tactics

Home maintenance professionals and salespeople sometimes employ high-pressure sales tactics, offering a price they claim is good for one day only. This strategy is designed to push property owners into an agreement before they have a chance to consider other offers.

“Many window replacement companies press their salespeople to sell on the first visit,” Patterson says. “For major purchases, always wait until the next day to make a decision. The ‘super-duper only available today’ deal will still be available in a couple of days.” 

3. Check Their Credentials

Many states require contractors to be fully licensed and insured to do business. If they aren’t, they may be flying under the radar and providing substandard work. Legitimate businesses will comply with state regulation.

Jeremy Anderson, general manager at Aire Serv, advised consumers to check that contractors are licensed and insured with their state. If contractors can’t provide the right paperwork and credentials, you should keep looking.

4. Look Out for Drive-By Scams

According to a congressional report on scams targeting senior citizens, home service fraud commonly occurs door-to-door. Con artists will drive through neighborhoods offering their services after a weather-related disaster, after a rash of break-ins, or as the seasons change. But once you’ve paid, they’ll provide unsatisfactory work or no work at all.

“Hire only professional contractors for cleanup and repair needs. Avoid any ‘drive-by contractors’ that may try to scam you after big storms,” urges Rainbow International president Mark Welstead. “It’s best to hire a reputable restoration company.”

5. Don’t Pay in Full Up-Front

While diagnostic and home visit fees do occur in the service industry, you should be wary of any contractor that demands payment in full ahead of time. According to the same congressional report, scammers will deliver poor work or abscond with your money after you’ve paid.

6. Pay with a Credit Card 

If a contractor only accepts cash, you should consider this a red flag—it’s too easy for them to pocket your cash with no consequences. Doug Rogers, president of Mr. Appliance, states that credit cards are the best way to protect yourself.

“It is a good idea to consider paying with a credit card so that you have some protection against attempted scammers, who want money first and plan to leave,” says Rogers. “Many credit card companies will help go to bat for you should you find yourself in the position of needing to dispute a charge amount.”

7. Use Your Best Judgment

If you’ve worked with quality contractors before, you know how it feels to receive quality, ethical service.

“At the end of the day, choose a reputable company that is transparent in its pricing, communicates properly with you, and stands behind its products and workmanship,” says Russ Jundt, founder and VP of Conserva Irrigation.

Protect your home and assets with these seven tips. By knowing what to look for, you can stop fraud in its tracks and avoid potential pitfalls.

Another way to protect your finances and save money is to shop smartly. For any home improvement project, be sure to carefully consider your options and take a few extra financial steps to avoid overspending. Peruse Credit.com’s Personal Finance Learning Center for more money-saving tips.

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