The Department of Homeland Security’s Federal Emergency Management Agency and the Louisiana Office of Homeland Security and Emergency Preparedness urge victims of Hurricanes Katrina and Rita to look out for scam artists. You are probably in need of a reputable contractor to help with repair and restoration. Inevitably, the demand for qualified contractors will exceed the supply. The demand for contractors and home repair may be an opportunity for home repair rip-off artists that may overcharge, perform shoddy work or skip town without finishing your job.
Because of the extent of damages from the Katrina and Rita disasters, many legitimate licensed home-repair companies can be booked solid for months. Frustrated and anxious homeowners and landlords, eager to get their property back in shape, may neglect to take the usual precautions when hiring contractors. As a result, some consumers will find that they've hired help that will be no help at all. Consumers need to be aware of the risks of hiring part-time contractors, contractors from surrounding areas, inexperienced contractors, and all too often, just plain crooks, who are out to make a fast buck.
FEMA offers the following tips for consumers facing major repairs after a disaster hits home:
- Deal only with licensed and insured contractors. You can verify a contractor’s license by visiting the State of Louisiana’s internet site at http://www.lslbc.louisiana.gov. You may also check with the Better Business Bureau, local homebuilders association, or trade council to see if any complaints have been lodged against the contractor.
- Check references and get recommendations. Any contractor should be willing to provide references from previous customers; a few calls could save you a great deal of grief and time. Ask friends, relatives, neighbors, co-workers, insurance agents, or other people in your community whom you know and trust, for their recommendations.
- Ask for proof of insurance. Make sure the contractor carries general liability insurance and worker’s compensation. You might be liable for any accidents that occur on your property if the contractor does not carry proper insurance.
- Insist on, and take your time about, signing a contract. If you can, compare services and prices before making a final decision. Get a written estimate that includes any oral promises the contractor made. Remember to ask if there's a charge for an estimate before allowing anyone into your home; the cost of a written estimate is often applied to the price of the repairs. Ask for explanations for price variations, and don't automatically choose the lowest bidder. Get a copy of the final, signed contract before the job begins. Do not sign a blank contract or one with blank spaces.
- Get any guarantees in writing. Guarantees promised by the contractor should be written into the contract and should clearly state what is guaranteed, who is responsible for the guarantee, and how long the guarantee is valid.
- Ask a knowledgeable friend, relative or attorney to review a home repair contract before you sign. If you get a loan to pay for the work, be cautious about using your home as security. If you don't repay the loan as agreed, you could lose your home. Consider asking an attorney to review the loan documents, as well.
- Obtain a local building permit if required. Permits may be required for site work, demolition, or reconstruction. Contact your local government for permit information.
- Resist dealing with any contractor who asks you to pay for the entire job up front. A deposit of one-third of the total price is standard procedure. Pay only by check or credit card, and pay the final amount only after the work is completed to your satisfaction. Don't pay cash.
- Consider purchasing the materials and supplies for the repair job yourself. By doing this, you can be sure the cost is accurate and you get the quality you want.
- Be ready to take your time. You may be desperate to get back into your home, but you may be better off in the long run if you take your time, make sure your home is safe, and work with a reliable contractor, even though it make take some time to schedule your repair.
Consumers should also be aware that some rip-off artists may pretend to be employed by FEMA or other agencies. Some traits of scams or con artists can include:
- Lack of proper identification – A FEMA or Small Business Administration (SBA) shirt or jacket is not absolute proof of someone’s affiliation with an agency. Ask to see the laminated photo identification card; if they don’t have it, they are probably not for real.
- Going door-to-door – Persons going door-to-door to damaged homes, or phoning victims, and claiming to be building contractors could be frauds. If they solicit personal information such as social security or bank account numbers they are not for real. FEMA inspectors may come to your neighborhood but all FEMA inspectors will have proper, laminated, photo identification. Remember, FEMA and SBA inspectors never charge applicants for disaster assistance or for inspections. If in doubt, do not give out information.
- Charging fees to be put on a list or fees to have forms filled out – Some scammers have asked for upfront money to be put on a list or demanded fees to fill out the disaster loan application.
- Offers to increase the amount of your disaster damage assessment – This is not wise and is a sure sign of a scam.
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