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Consumer Advisories
April 2002



Prevent Home Repair Scams and Disputes

Spring is prime time for home repairs -- and that makes it prime time for outright scams or frustrating disputes. You can take action to avoid both problems.

Home repair scams by "itinerant" or traveling con-artists work like this: Con-artists stop at your door, give you a hard sell, and offer sensational low prices. It might be for roofing or painting, or asphalting your driveway. The con-artists insist that you pay in advance -- but they do little or no work and never return. Remember, legitimate contractors very rarely solicit door-to-door. Be skeptical. The main rules are to check out a contractor, and never to pay large sums in advance to a contractor you don't know. Help older neighbors who might be pressured or intimidated into paying traveling con-artists.

A few 'bad-apple' local contractors also take large advance payments but fail to do the work, or do just part of a job or very shoddy work. This is hard to prove as fraud, but it's costly and frustrating. Follow these tips to protect yourself when you hire a contractor:

  • Check out the contractor before you sign a contract or pay any money. Ask if the contractor is registered with the Labor Services Division of Iowa Workforce Develop-ment (800-562-4692, ext. 25871). Ask for local references, and check them out. Call the Attorney General's Consumer Protection Division to see if it has complaints.
  • Get it in writing. Before any work begins, agree on a written contract detailing work to be done, responsibility for permits, costs, and any other promises. Request a copy of the contractor's liability insurance certificate. Put start and completion dates in writing and consequences if the contractor fails to follow them (example: the contract could be nullified if the contractor doesn't start on time.) If you sign a contract at your home, in most cases you have three business days to cancel.
  • Avoid paying large sums in advance if you don't know the contractor. If you have to make a partial advance payment for materials, make your check out to the supplier and the contractor. Insist on a "mechanic's lien waiver" in case the contractor fails to pay others for materials or labor.
  • Be very cautious of credit or financing arranged by a contractor. This is an area of serious abuse by a few contractors in Iowa who arrange credit with high-cost lenders. Such loans may have high interest rates, steep up-front fees, and even costly brokers' fees. Check first with your attorney or a local lender you can trust.

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