Contractor scams that target homeowners

Some people who offer to work on your house are running a scam, often at the door or right after a storm.

The signs

• Someone knocks on your door and says they're working in the neighborhood.
• They have leftover materials from another job.
• They push for a decision right away.
• They want the whole price up front, or will take only cash.
• They ask you to get the building permits yourself.
• They suggest a lender they know to pay for the work.

After a storm, a scammer may also say no license is needed for the work, offer a discount only if you sign now, or ask you to sign over your insurance check. Some insist on payment by wire transfer, gift card, payment app, cryptocurrency or cash. Anyone who charges a fee to help you get FEMA aid is running a scam, since FEMA doesn't charge to apply.

The loan on your house

In one common scam, a contractor offers to install a roof or remodel a kitchen and says they can arrange the financing through a lender they know. Once the work starts, they hand you papers to sign, some of them blank, or rush you through them. Later you find you've agreed to a high-interest home equity loan, with points and fees, secured by your house. The work may be poor or never finished, and once the lender has paid them, the contractor stops answering.

Don't sign anything you haven't read, can't understand or that has blank spaces, and don't let anyone pressure you into signing. Never sign over the deed to your house without first talking to someone you trust.

Checking who you're dealing with

Confirm that the contractor is licensed and insured before any work starts. Check the license with your state or county, and ask for proof of insurance. Search the company's name with words like "scam," "review" or "complaint," and ask people you trust for names. Get estimates from more than one contractor, and don't take the lowest automatically.

How the money moves

Don't pay for the whole job up front. Pay by credit card or check, never by wire transfer, gift card, payment app, cryptocurrency or cash. Hold the final payment until the work is done and you're satisfied, and keep every invoice and receipt.

An annotated example

What to do next

Before anyone starts work, confirm the contractor's license with your state or county and search the company's name with "scam" and "complaint." Keep every invoice and receipt for the job in one place.