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Consumer Advisory Bulletin-April 2009
Prevent Home Repair Scams and Disputes
Spring is coming, and home-improvement fraud won’t be far behind. We see it every year. Home repair needs pile up over the winter, and everyone is eager to make improvements. Home-repair fraud is as common as the return of birds in spring.
Home-improvement fraud includes contractors who ask for substantial up-front payments, do little or no work, and never finish the job right. Other contractors offer a low price and then charge a lot more as the job progresses. Others are “fly-by-night” traveling scam-artists who “case” neighborhoods to try their paving or roofing scams.
Follow these tips to avoid being taken by home-repair scams and disputes:
- Don't fall for the "knock-at-your-door" scam where someone shows up “out of the blue” and says your driveway needs repaving or your house needs new shingles – and they “just happen to have materials left over” at a big price discount. They are sure to take your money and run, without doing the job at all or doing it right. [Go to bulletin on Asphalt Paving Scam.]
- Check out contractorsbefore you sign a contract or pay any money. Request local references -- and check them out. Contact the Attorney General’s Office to see if it has complaints (call 515-281-5926, or 888-777-4590.) Contact the Better Business Bureau (515-243-8137, or www.bbb.org.) Check to see if a contractor has been sued by unsatisfied customers -- go to www.iowacourts.state.ia.us.
- Get several written estimates, choose the best, and get a contract in writing. Before any work begins, agree on a written contract detailing work to be done, responsibility for permits, costs, and any other promises. Ask for a copy of the contractor's liability insurance certificate. Put start and completion dates in writing, and consequences if the contractor fails to meet them. (Example: the contract could be nullified if the contractor doesn't start on time.) Note, if you sign a contract at a place other than the contractor's regular place of business – such as at your home – you usually have three business days to cancel the contract.
- Avoid paying large sums in advance. If you need 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.
- Financing. It is usually a better deal and safer to obtain financing through your local bank or credit union, rather than a contractor. If you do arrange financing through the contractor and the papers are signed away from the contractor’s place of business, you usually have three days to cancel the financing. The right to cancel the financing is separate from the right to cancel the home improvement contract.
Listed below are additional resources regarding home repairs and disputes.
Federal Trade Commission
National Association of Home Builders
For more information or to file a complaint, contact the Attorney General's Consumer Protection Division, 1305 East Walnut Street, Des Moines, Iowa 50319. The web site is www.Iowa AttorneyGeneral.org. Call 515-281-5926, or toll-free at 888-777-4590.
Consumer Advisory on "Asphalt Paving Scams."
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