Contractor fraud can cost unsuspecting homeowners or business owners thousands. You may even know someone who hired a contractor, paid for the work up front and then never heard from the contractor again. This happens across the country, including in Baton Rouge.
Another common scenario is the contractor that begins the work and leaves before finishing the job. This not only costs people any payments already made to the contractor but thousands more to pay a legitimate contractor to not only finish the job but fix any damage done by the original contractor that defrauded you.
While it can be difficult to tell the difference between a contractor you can trust and one that is a crook, there are signs that may help you choose the right one. Here are some red flags to look for the next time you hire a contractor.
No list of references
If you ask for a list of references or details about previous work and the contractor either refuses to produce this information or continuously gives excuses for not providing it, this might be a strong indicator that the contractor is a fraud. Try conducting an online search and if you still come up empty, it is probably best to look elsewhere for a contracting company.
In general, renovations, remodels and certain repairs require permits. If your contractor does not get a permit for the work or tries to convince you that you don’t need one, take this as a sign to go with a different contractor.
Another sign that a contractor might be trying to defraud you is if he or she does not provide detailed expense reports and cost breakdowns. A legitimate contractor should give you detailed lists of the materials the crew is using for the project as well as cost breakdowns throughout the various stages.
Up front payment
Typically, contractors will request up to 10 percent of the estimated bid to begin work and then periodically bill you as the company completes the project. If a contractor requests more than 10 percent up front, asks you to pay for work that is still pending or for materials that have not arrived, take this as a sign that your contractor may not be honest.
Other red flags that might point to a fraudulent contractor include suggestions of projects you do not want or need, the offer of a steep discount and a general bad feeling. If you do end up with a bad contractor that defrauds you, you might be able to take legal action.