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How to Stop Fraud: Check for a Contractor License

Contractor fraud is a growing issue across the country as fraudulent contractors find new and expansive methods of tricking homeowners into paying for work that is either done poorly or not completed at all.  Despite ongoing efforts to inform homeowners about the dangers of contractor fraud from national organizations and insurance carriers alike, cases have only continued to rise over the last few years. In 2022 alone, Americans lost $82 million to these scams.

One of the most effective ways to confirm whether or not a contractor is reputable is by asking for a copy of their contractor license. Companies in good standing are properly accredited.

3 Other Warning Signs of Contractor Fraud

Alongside checking for a contractor license, there are several other key ways to indicate if you’re being scammed. Below, we outline the top three most common and provide insight into how to avoid them.

#1: You’re approached by an unrequested contractor

One of the most common tactics of fraudulent contractors is to go house to house after a natural disaster and try to elicit work. For instance, they may claim they’ve been working on a neighbor’s roof and noticed you have damage on yours they’d be happy to take a look at for you. 

However, in most cases, this is not the truth. Instead, fraudulent contractors participate in what is known as “storm chasing” and travel the country looking for people whose homes are in a vulnerable state after a storm or who may believe their home has suffered damage because of recent weather—even when it hasn’t. 

Be on guard for this kind of baiting from scammers and avoid engaging with contractors you didn’t personally request.

#2: The contractor uses urgency or high-pressure tactics

Fraudulent contractors might offer you a special deal if you pay upfront or ask you to sign a contract on the spot—a pressure tactic to get you to make a rash decision you will likely regret. 

Don’t let a contractor guilt or scare you into making a decision you’re uncomfortable with; you have the right to request the time and materials you need to feel confident in your arrangement, and any contractor who denies you that right is likely not reputable. 

#3: They ask for payment upfront

Many scammers request a sizeable down payment for work and never return to fulfill their obligation. If a contractor asks for money before completing the job, this should be a red flag. Always feel comfortable contacting your insurance carrier to check that a company is in good standing before providing payment.

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