Courtesy of Goodale Miller Team – Century 21 Miller Real Estate Ltd.
Ontario, Canada – We are around the time of the year when a lot of people are adding some design features in their homes, fixing what’s broken, and perhaps even renovating entire rooms, and hence, we felt the need to write this blog about how you can avoid home improvement fraud.
People often think that fraud only occurs at the office or their place of work but the truth is, whenever and wherever there is an opportunity, fraud is bound to take place – yes, and it often takes just one corrupt contractor to mess up your whole home improvement plan.
As a renter or a home owner, it is often the case that there would be things that needs fixing around your place, so what you do is find a residential contractor. You see, most contractors would require some down payment, more so for pricey projects. In here lies one of the red flags with which you can avoid home improvement fraud if you know what to look for.
Seeing the Red Flag
The contractor will ask for a down payment in the form of credit card, check, or cash and below is why you have to be careful.
Cash – Down payments in cash is often held as a red flag when dealing with a residential contractor, but why? Being low on cash can mean that the contractor may be having problems handling the finances of the business.
The contractor having some financial difficulties is not necessarily a problem on its own, but it is human nature to seek the easy way out when dealt with a predicament. If that contractor is in serious debt or need of cash, your money may be used by the contractor for personal needs instead of your home improvement project. Another issue with cash is that it may be difficult to prove later on that you’ve made some payment, as an improperly completed receipt is not considered to be an adequate legal proof of having a transaction.
Checks – Checks leave a paper trail, so it is a lot safer to use than cash. Checks are also easy to track and control.
Credit cards – This option would be the safest and easiest way to handle home improvement payments. It is easy to track and control like the check, but is a bit easier and more convenient to use.
These days, all you have to do is to hand over your credit card to the contractor for it to be scanned using a handheld scanner and that’s it! Everything is recorded by the bank or banks you both are using. So if there is a need to prove any payment made at a later date, you can easily access the records through your own account. In case of fraud, there is also a higher probability of you being able to retrieve your money if you paid via a credit card.
Now that you know how to avoid home improvement fraud by checking out a contractor’s payment methods and not falling victim to the down payment scam, you might also want to take extra precautions for bigger projects. You may hire a project manager if you’re super busy or at least make sure that you’ve done some background check on all individual contractors and firms you’re considering for your home improvement project before making a final decision.