​Homeowner Scams Rise

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August 10, 2012

Homeowner Scams Rise – One of the top five scams is homeowner improvement, and it’s on the rise, according to The Consumer Federation of America, which released its 2011 Consumer Complaint Survey Report. The problem remains at number 3 on the top 10 list after automobile and debt-related complaints. Other real estate problems (timeshares, retirement communities) are new to the top 10 list this year.

The report includes eye-opening anecdotes of scams from among the 38 state, county and city agencies in 22 states who contributed to the report, with tips on how to avoid being scammed. They recovered more than $147 million on behalf of wronged consumers last year alone. So if you have a problem, don’t be shy about calling one of the consumer protection agencies listed on the Federal Citizen Information Center’s Consumer Action website.

Watch for home renovations fraud as shoddy construction work and contractors’ failure to complete or even start a job continue to plague homeowners, according to the report. In one case, a Florida elementary school teacher gave a contractor $17,000 for an addition, but the contractor closed his business and fled the country before doing any work. The Pinellas County Department of Justice and Consumer Services tracked the contractor to Asia, and then when he was later in California, arranged to have him arrested and extradited to Florida.

The man eventually made full restitution to the teacher.

The best advice is to only pay a deposit when you contract for home improvement work (some states limit the percentage of the total job price that can be requested upfront). Get a written contract that sets out a payment schedule, proportionate to the work to be done. Don’t pay the final installment until the work is done.

In addition, don’t hire itinerant contractors that show up uninvited at your door. Contact the police with a description of the vehicle and license plate number.