Home Repair Scams

Your home may be your most valuable financial asset. That's why it's important to be cautious when you hire someone to work on it. Home improvement and repair and maintenance contractors often advertise in newspapers, the Yellow Pages, and on the radio and TV. However, don't consider an ad an indication of the quality of a contractor's work. Your best bet is a reality check from those in the know: friends, neighbors, or co-workers who have had improvement work done. Get written estimates from several firms. Ask for explanations for price variations. Don't automatically choose the lowest bidder.

Don't Get Nailed

Not all contractors operate within the law. Here are some tip-offs to potential rip-offs. A less than reputable contractor:

• Solicits door-to-door
• Offers you discounts for finding other customers
• Just happens to have materials left over from a previous job
• Only accepts cash payments
• Asks you to get the required building permits
• Does not list a business number in the local telephone directory
• Tells you your job will be a "demonstration"
• Pressures you for an immediate decision
• Offers exceptionally long guarantees
• Asks you to pay for the entire job up-front
• Suggests that you borrow money from a lender the contractor knows

The "Home Improvement" Loan Scam

A contractor calls or knocks on your door and offers to install a new roof or remodel your kitchen at a price that sounds reasonable. You tell him you're interested, but can't afford it. He tells you it's no problem - he can arrange financing through a lender he knows. You agree to the project, and the contractor begins work. At some point after the contractor begins, you are asked to sign a lot of papers. The papers may be blank or the lender may rush you to sign before you have time to read what you've been given to sign. You sign the papers. Later, you realize that the papers you signed are a home equity loan. The interest rate, points and fees seem very high. To make matters worse, the work on your home isn't done right or hasn't been completed, and the contractor, who may have been paid by the lender, has little interest in completing the work to your satisfaction.

You can protect yourself from inappropriate lending practices. Don't:

Agree to financing through your contractor without shopping around and comparing loan terms

Keeping Records

Keep all paperwork related to your project in one place. This includes copies of the contract, change orders and correspondence with your home improvement professionals. Keep a log or journal of all phone calls, conversations and activities. You also might want to take photographs as the job progresses. These records are especially important if you have problems with your project - during or after construction.

Where to Complain

If you have a problem with your home improvement project, first try to resolve it with the contractor. Many disputes can be resolved at this level. Follow any phone conversations with a letter you send by certified mail. Request a return receipt. That's your proof that the company received your letter. Keep a copy for your files.

If you can't get satisfaction, consider contacting the following organizations for further information and help:

• State and local consumer protection offices Your state or local Builders Association and/or Remodelors Council Your local Better Business Bureau
• Action line and consumer reporters. Check with your local newspaper, TV, and radio stations for contacts. Local dispute resolution programs

The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. You can file a complaint by calling the Federal Trade Commission Consumer Response Center toll-free at 1-877-FTC-HELP (382-4357)or filling out the Federal Trade Commission Consumer Complaint Form online.

General Consumer Rights Message Board for more help