Q: My wife and I bought our first house last year. It needs some fixing up but the price was right and we’re pretty handy and can do a lot of the work ourselves. But there seem to be a lot of companies coming around our neighbourhood offering their services. The latest was lawn care and aeration, and while we could probably use them, we are still busy with the inside of the house. I don’t know how all of the companies know that we’re new homeowners, but we’ve had offers to do the roof, check our furnace, and replace our windows. We have been tempted a few times to sign up for whatever they’re offering, especially the window company because they said there’s a rebate we would qualify for. We ended up not doing it because it was still very expensive, but how do we know who to go with when a salesperson comes to our door? ~Stephen
A: The nicer weather and longer days don’t just signal the start of spring, but a renewed interest in home renovation scams as well. From painting to landscaping, updating a kitchen, servicing gas appliances, or replacing a fence, it all takes time, money, and skills that many homeowners don’t have. Scam artists know this and use it to their advantage, offering enticing deals at a time when many Canadians are watching spending carefully. It’s often later, when someone realizes they’ve been duped, that they recognize the deal was too good to be true.
In 2022, home improvement scams were the No. 1 riskiest scam in Canada and the U.S. according to a survey conducted by the Better Business Bureau, with those succumbing to a fraudster’s tactics losing an average of $1,900. That sum of money, and the accompanying emotional and psychological effects of being scammed, can be a tough pill to swallow. To help protect yourself financially, here are tips to help you spot a home improvement scam.
Initiate contact with a contractor yourself
Fraudsters can arrive in any form; at your door, on the phone, or via email, online ad or even text message. If you are interested in what they have to offer, step away and do some research yourself before signing up for a service or agreeing to a contract. Look up the company by name online with a fresh search, rather than clicking a link. Read through their website to get a feel for the type of work they do and how they treat their customers. Give them a call at the phone number you looked up yourself, not the number they provided to you directly.
If you are contacted by someone who would like to come and inspect something for free inside your home, for instance a natural gas contractor who wants to inspect the furnace, be especially cautious. Ask for their credentials and verify them with the appropriate regulatory bodies before allowing them into your home. When someone states that they work in conjunction with a utility company, contact the utility company and verify who their authorized contractors are. If they are legitimate, they won’t mind coming back another day. Request written quotes from them and at least two other vendors before deciding what work you may or may not entertain.
For work that might require a permit, check with your municipality if they have a watch list of contractors or service providers that have done questionable work in your city in the past. The clerk at the city desk likely won’t be able to steer you away from anyone in so many words, however, listen carefully as they answer your questions. You might get the information you need if you read between the lines.
Check into the background of any company you plan to hire
The importance of doing thorough research about a company can’t be understated. Take the time to look at reviews about the company. The Better Business Bureau for your area is one source of information. Google, Yelp, or social media reviews can provide additional insights. Check with the applicable licensing body to see if there have been any complaints against them. If your community has a Facebook group, search within that group to see what others may have experienced with them or post a question to find out more.
No one is perfect and it is unusual if a company or contractor only has perfect reviews. How a company responds to criticism says a lot about them. Do they attempt to make it right and learn from their mistakes, or do they simply not respond to negative reviews or complaints? Ask for references in your area, call them, and view samples of their work whenever possible.
It’s also important to check that anyone you plan to do business with has the right insurance. At a minimum they should have liability insurance and be insured under your province’s workers’ compensation insurance. Your own insurance agent can provide you with information about the type of insurance you need to look for when hiring contractors for work on your property, as well as any additional insurance you, as the homeowner, should have.
Resist high pressure sales tactics
On the spot deals, time limited discounts, upfront payment demands, friendly agreements without a signed contract, non-typical payment requirements — such as with gift cards — or requests for more information than needed, such as for your SIN or driver’s licence, are all red flags that can’t be ignored. Any reputable company will give you time to consider their offer. If something seems too good to be true, it probably is.
The bottom line on avoiding home improvement scams
Fraudsters are unbelievably sophisticated and find new and clever ways to exploit any opportunity for their own benefit. Stay vigilant and don’t believe everything you see or read. Scammers can build fake websites that look almost identical to the site they’re trying to mimic. The caller ID they use can be fake and the offer they give you can be a scam as well. The best way to stay safe is to stay informed and in control. However, if you think you might have fallen victim to a scam or fraud, don’t be embarrassed. File a report with the Canadian Anti-Fraud Centre and seek their guidance about next steps. While you may not be able to recover the money you lost, regaining your peace of mind might just be more important.
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Peta Wales is president of the Credit Counselling Society, a non-profit organization. For more information about managing your money or debt, contact Peta by email, check nomoredebts.org or call 1-888-527-8999.