Watch out for home improvement scams, warns BBB

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As homeowners work on their renovation projects before the rainy winter returns, the Better Business Bureau (BBB) ​​is urging the public to exercise caution when hiring a contractor.

As homeowners work on their renovation projects before the rainy winter returns, the Better Business Bureau (BBB) ​​is urging the public to exercise caution when hiring a contractor.

With numbers similar to last year, the BBB received several Scam Tracker reports that people are losing thousands of dollars to contractor scams, mostly due to underground businesses using high-pressure sales tactics and demanding up-front fees.

These scammers come up with plausible reasons for consumers to give them money and deliver either shoddy work or no work at all.

“Home renovation scams ranked number four on the BBB list of Top 10 Riskiest Scams in Canada in 2021” said Simone Lis, President and CEO of BBB serves mainland British Columbia.

“Homeowners should be extra careful when hiring a contractor for their home improvement projects, as 69% of consumers who encounter this scam lose money, with a median average loss of $661. If you hire the wrong supplier, you could face a wide range of problems, from unfinished work and damage to your property, to wasted valuable time and hard-earned money.”

A British Columbia owner shared his experience with BBB this year, saying “[This] business owner drives around affluent neighborhoods in his truck and with his crew of young men soliciting companies to clean roofs and cobblestones, and promote other home improvement work. The contractor presents himself as an experienced and competent contractor and takes advantage of unsuspecting owners.

“However, once I hired him, I experienced price gouging. He made big promises with no follow-up, and the service guarantee is worthless. I noticed he often changed the name of his business. He will print new promotional cards, but the business address is still non-existent or wrong.“

Consider these tips when hiring someone to work on your home:

  • Research and gather information.
    • Find an entrepreneur’s business profile on BBB.org to get free information about their business, check out verified reviews, see if there’s a history of complaints, and find out if it’s an accredited business. BBB Accredited Companies are committed to BBB Accreditation Standards, including: Building Trust, Advertising Honestly, Telling the Truth, Being Transparent, Honoring Promises, Listening to Customers , protect confidentiality and embody integrity.
    • Also do a web search for the name of the online company with the words “Complaint”, “Review” or “Scam” to find different results.
    • Ask the company if employees and contractors undergo background checks. Are they trained and certified? What ID will they show when they come to your house?
    • Ask if the contractor is a member of a professional association that has standards or a code of ethics.
    • Ask for references. Ask the contractor for a list of recent local references you can contact. Ask the references about the services rendered and their overall experience with the contractor and the quality of the work. Ask if the contractor met the estimated budget and the project completion date. If possible, inspect the contractor’s work yourself.
    • Request multiple quotes. You should always shop around and get at least three quotes from different companies. Make sure all offers consider the same set of criteria. Remember that the lowest bid is not necessarily the best bid; if one offer is significantly lower than the others, the contractor may cut corners or not understand your job requirements.

  • Get it in writing. Always get estimates in writing and never let any job start without a written and signed contract. Don’t be forced to sign an agreement before you’re ready, and make sure you read and understand everything before signing.
    • The contract should include contact information, start and end dates, a detailed description of the exact work to be performed, material costs, payment terms and warranty information.
    • Specify who must obtain the necessary building permits and who is responsible for cleaning.
    • Make sure all verbal promises are included in the contract.
    • You can also ask how much work will be subcontracted and request information about subcontractors.
    • Ask questions if you don’t understand any part of the contract. Never sign an incomplete or partially blank contract.

  • Check license and insurance. Always make sure that the company you decide to work with has the necessary licenses and insurance to work in your area.
    • In Canada, the requirements differ from province to province. Look for information specific to the province where you are having the work done. The Industry Training Authority (ITA) is a great starting point for understanding what types of contractors need licenses and your Local BBB can help.
    • You’ll also want to make sure their contractor’s insurance is up to date. Once you have your contractor’s insurance information, call the carrier to confirm appropriate coverage for workers’ compensation, property damage, and personal liability in the event of an accident.

  • Confirm building permits. Your contractor must have the proper permits before starting your project. They’ll usually get the permits, but you’ll probably have to pay for them. This should be detailed in your contract. Request that all final inspections be carried out by the local building official prior to final payment.
  • Ask about a waiver of privilege. In many Canadian provinces there is a Builders Privilege holdback, so be sure to understand any financial obligations you may be responsible for.
  • Consider future warranty/service issues. Make sure you know your warranty coverage and how to handle service issues. Make sure you know who to contact and how to contact them for future warranty issues.
  • Arrange a payment schedule. Never pay in full in advance. Spread your payments so your final payment isn’t due until the work is complete and you’ve fully inspected it. Do not pay cash; make sure your check is made out to a business and not an individual, or that you are using a credit card. Paying with a credit card will provide some recourse if the work is not completed as stated in the contract.
  • Obtain a receipt. Ask for a receipt marked “Full Payment” when the work is complete and your final payment has been made. You can also ask for written confirmation of the installment payments made throughout the work process.
  • Keep your contract. Keep your contract for future reference, warranty details or if you have any questions after the work is complete.

For more information on your home project, visit BBB’s Your head office.

About BBB

The Better Business Bureau has been helping people find businesses, brands and charities they can trust for over 110 years.

In 2021, people turned to BBB more than 200 million times to get BBB business profiles on 6.3 million businesses and charity reports on 25,000 charities, free on BBB.org.

Local and independent BBBs can be found in the United States, Canada and Mexico, including BBB Serving Mainland British Columbia, which was founded in 1939 and serves mainland British Columbia and the Yukon Territory.

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