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Financial Education

Home Improvement Scams

Make sure your contractor isn’t really a scammer!

Worried woman talking about blueprint problems with a contractor (and possible scammer) in her house.
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Scammers are always looking for new ways to deceive people to make a quick buck, and home improvements are a common target. As the weather warms and home improvement projects start taking center stage, contractor scams start blossoming like weeds after a spring rain.

Learn what to look out for in these home improvement scams, and how to avoid them.

The Door-To-Door Contractor Scam

In a door-to-door scam, scammers show up at a target’s doorstep, claiming to be contractors or representatives of a home improvement company. They may offer to do work for a low price or even for free, alleging that they are in the neighborhood and have extra materials, so they’re happy to “do you a favor.”

Cheap or free labor sounds amazing, doesn’t it? And it is—until you realize the “contractor” is not licensed or insured, uses subpar materials and does shoddy work. They may also try to get you to sign a contract on the spot, not leaving you any time to do proper research or get competing quotes.

In the worst variation of this scam, the alleged contractor will ask to be paid upfront in full, claiming they need the money to buy materials or cover other expenses. However, once they have your money, they disappear without doing any work.

Stay safe: Never hire a contractor on the spot. Always ask for proof of license and insurance as well as references from previous clients. Also, never pay for a project in full before it’s completed.

Don't Hire a Contractor That is Really a Scammer for your home improvement project.

The High-Pressure Sales Scam

Some irreputable home improvement companies use high-pressure sales tactics to get you to sign a contract. They may offer a special deal that is only available for a limited time or claim they can only do the work if you sign a contract right away. These tactics are only a ploy to pressure you into making a decision before you are ready. They may also hide additional fees or charges in the contract, or promise things that they cannot deliver.

Stay safe: Never rush to hire a contractor. Don’t be swayed by limited-time offers, and always carefully read the contract before signing.

The “As Seen on TV” Scam

In this home improvement scam, an alleged contractor tricks you into thinking a product or service is endorsed by a reputable source. They may claim that their product or service has been featured on a popular TV show or website, or that it has been used by celebrities. However, these claims are completely false or highly exaggerated. The product or service may not live up to its promises, or it may be overpriced compared to similar products or services.

Stay safe: Always do your research and read reviews from other customers on multiple platforms before hiring a contractor. Don’t assume celebrity endorsements or claims of popularity are legit without verifying them first.

The Insurance Scam

In this variation, scammers claim they can help you get a new roof or another home improvement project covered by your insurance company, despite the fact that there was no covered event making the project necessary. This, of course, is insurance fraud, which is illegal and can lead to fines and jail time.

Stay safe: Always check with your insurance company before starting any home improvement project. Make sure the project is covered by your policy and that you understand the deductible and other terms of your policy.

Home improvement projects are exciting; getting scammed while renovating your home is not. Follow the tips above to help protect yourself. Stay safe!

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CUNA 2023 diamond award trophy icon

CUNA 2023 Diamond Award Winner

Financial Education

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