A national crime prevention organization is encouraging Americans to be proactive to avoid becoming victims of contractor fraud.
Every year, hurricanes, tornadoes and other catastrophic events leave millions of Americans struggling to recover and rebuild their lives. These events also provide an opening for dishonest contractors, according to the National Insurance Crime Bureau.
Last year was historic for weather and climate disasters in the U.S., with 28 separate events costing at least $1 billion and totaling more than $93 billion in catastrophe losses. Upwards of 10% — or $9.3 billion — was lost to post-disaster fraud, which not only impacts individuals but also insurance premiums.
To help combat the growing problem, the NICB is to working to educate homeowners and business owners during Contractor Fraud Awareness Week, which is this week.
The NICB recommends following these tips:
Be Proactive
- Assess damages — If a resident thinks they have catastrophe-related damage, they should reach out to their insurance company and ask for clarification on coverage.
- Recruit a professional — Seek out a licensed, insured and well-reviewed contractor before any potential fraudulent contractors come knocking on doors.
Research and Verify Before Signing Anything
- Research and verify — Before hiring a contractor, research their credentials, reputation and track record. Check for licenses, certifications and reviews from previous clients. Verify their insurance coverage and inquire about any past complaints or legal issues.
- Get multiple quotes — Obtain bids from multiple contractors for comparison. Be wary of significantly low bids, as they may indicate substandard work or hidden costs. Aim for a balance between affordability and quality.
- Beware of red flags — Be alert to red flags such as high-pressure sales tactics, vague or evasive answers or reluctance to provide written estimates or contracts. People should trust their instincts and proceed with caution if something seems off.
Stay Involved and Take Account
Written contracts — Always insist on a written contract detailing the scope of work, materials, timeline and a payment schedule that does not include large upfront payments. Review the contract carefully, ensuring that all terms and conditions are clearly outlined and agreed upon by both parties.
Stay involved — Stay actively involved in the project by regularly communicating with the contractor and monitoring progress, while keeping records of all work communications.
Seek legal advice if necessary — If contractor fraud is suspected, or someone encounters significant problems during the project, seek legal advice promptly. A legal professional can help people understand their rights, explore options for resolution and take appropriate action to protect your interests.
Report Fraud
Call NICB — Anyone with information concerning insurance fraud or vehicle theft can report it by calling toll-free at 800-835-6422.
Call police — To report fraud or theft locally, contact your local police department or the Johnson County 911 Center’s non-emergency line at 317-346-6336.
