How to avoid falling victim to a home improvement scam

INDIANAPOLIS — Getting some work done around the house this spring? Make sure you don’t fall victim to a home improvement scam.

Whether it is replacing windows and doors, adding a home office or updating a kitchen or bath, home improvement projects can bring added comfort and value to your home. However, the Attorney General’s office said it is important to do research before hiring a home improvement contractor.

“Hoosiers can protect themselves by doing their research, asking the right questions, and getting a written contract that defines the full scope of the work and specifications for the job,” said Attorney General Rokita.

The Better Business Bureau says home improvement scams can start with a knock on the door, flyer, or an advertisement. The contractor may offer a low price or short time frame.

Once they start, the contractor may “find” issues that significantly raise the price. If you object they threaten to walk away, leaving the project half-finished. The BBB says another variant of the scam is accepting an upfront deposit and never returning to do the job.

Red flags to be on the lookout for

  • Cash only deals
  • High-pressure sales tactics
  • High upfront payments
  • Reluctance to share references
  • Handshake deals without a contract

One resource the Attorney General’s office said people can use to protect themselves is the Indiana Builders Association (IBA). This association has more than 2,600 members, many of whom perform home improvement services. They also offer resources to connect people to industry professionals for their next project.

“Our members are invested in making their communities better. Fly-by-night and out-of-state contractors who come in town after a storm to take advantage of our friends, family and neighbors gives the whole industry a tarnished reputation,” said Paul Schwinghammer, IBA 2022 President. “The IBA is a trusted resource when it comes to making an informed home buying, remodeling, or general repair decision.”

Even if people do their homework, problems can still arise. According to the BBB Scamtracker, people in Central Indiana reported $9,416.65 in losses to home improvement scams in 2021. This includes an $8,217 loss for a paving project to a company that the BBB issued a warning about.

Better Business Bureau warns people about Plainfield business

The Attorney General’s office and IBA provided these tips to avoid falling victim to a home repair scam.

  • Ask your family, friends, and co-workers for contractors they have used who have done good work.
  • Before signing a contract or making a payment, contact the Attorney General’s Consumer Protection Division and the Better Business Bureau for complaint information on contractors you are considering.
  • Get multiple bids from local contractors. Avoid contractors who spontaneously show up at your door offering a “bargain” price for painting, driveway sealing, roof repairs, etc.
  • Get a written contract before making a payment. Indiana law requires home improvement contracts exceeding $150 to be in writing. Before signing the contract, make certain it includes:
    • The price of the job
    • Payment schedule
    • A detailed description of the work and materials
    • Estimated start and completion dates
    • The contractor’s name and address
    • A name and telephone number of the person to contact if problems arise
    • The contractor’s e-mail address
    • The contractor’s signature
  • Never pay for the entire project before the work begins.
  • If you do make a down payment, remaining payments should be tied to completion of specified amounts of work.
  • If the contractor is arranging financing, the contractor should provide you with an installation sale contract disclosing various credit terms like the finance charge and the APR.

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