Unscrupulous Contractor Scams
These are characterized by the following:
- Door-to-door solicitations to do work at a reduced price. Once payment is made little or no work is done and the project is abandoned.
- High pressure for an immediate decision leaving no time to get competitive bids, check licenses, or contact references.
- Offer to perform a free inspection in which non-existent problems are found.
- Demand for immediate payment in cash. Unscrupulous contractors will take the money and run.
- Illegally large down payments. By law a down payment cannot exceed the lesser of 10 percent of the project price or $1,000. See California Business and Professions Code Sec. 7159.5(a)(3).
- Verbal agreements instead of a written contract.
Any suspicious solicitations should be reported to the SDPD at (619) 531-2000 or (858) 484-3154 with a description of the person and his or her vehicle license plate number.
You can avoid scams in hiring a contractor by doing the following:
- Beware of persons going door-to-door in your neighborhood, having an “office” is his or her vehicle, or driving a vehicle with out-of-state license plates.
- Take your time in making a decision.
- Get a contract in writing and don’t sign anything until you understand the terms. The contract should include a specific description of the work to be done, materials to be used, total cost and payment schedule, and start and completion dates.
- Make sure a contract, if signed in your home, contains a three-day right to cancel provision with an attached notice of cancellation form that explains this right. If the contract is for the repair or restoration of residential premises damaged by a disaster, i.e., any sudden or catastrophic event for a state of emergency has been declared by the President of the United States or the Governor, or for which a local emergency has been declared by the executive officer or governing body of any city, county, or city, and county, you have a seven-day right to cancel. These rights are defined in California Civil Code Sec. 1689.7.
- Don’t pay cash and not more than the legal limit for a down payment. Beware of contractors who won’t accept a check or who wants the check made out to him or her instead of the company.
- Check with other lenders before allowing the contractor to arrange the financing for the job.
- Get at least three bids and check the contractor’s references.
- Hire only licensed contractors. Anyone performing home improvement work valued at $500 or more must be licensed by the Contractors State License Board (CSLB). Get the contractor’s license number and verify it online at www.cslb.ca.gov or by calling (800) 321-2752. Ask to see a second piece of identification with a photo.
- Go to the Guides and Pamphlets page of the CSLB website for more information about safe contracting.
Also, any contractor who is hired to remodel a home built before 1978 must be licensed and certified for lead safety by the U.S. Environmental Protection Agency (EPA). The contractor is also required to provide you with an EPA brochure on the lead safety before starting work. That brochure is available online at www.epa.gov/lead/pubs/renovaterightbrochure.pdf . If you remodel your own home you should refer to that brochure for precautions to take to reduce exposure to lead and asbestos during the remodeling.
Another common contractor scam begins with a low-cost air duct inspection or cleaning. A dishonest contractor may then say your ducts are filthy and contaminated with black mold, which costs about $500 to kill with ultraviolet light. Others may also suggest that you need a complete furnace or air duct cleaning which costs about $400, and a replacement air filter that costs over $100. The U.S. Environmental Protection Agency says that most air duct cleaning is unnecessary. Dust can collect on the air returns but they can be vacuumed easily. And filters can be replaced inexpensively. The whole job should cost less than $75. Any service costing more than a few hundred dollars is probably a scam. Men who do this often arrive in an unmarked vehicle, don’t wear a company uniform, use high-pressure sales techniques to scare you, and leave without providing a receipt for work done.