What Are the Top Five Warning Signs of Contractor Fraud?

Be careful of contractor fraud

Are you planning to construct or renovate a home? If you are like many people, you may seek out a contractor to perform the construction or renovations. Unfortunately, there are cases where contractors will scam homeowners out of their hard-earned money. Therefore, you should always be cautious when conducting any type of business transaction with a contractor or contracting service. Warning signs of contractor fraud may include:

  1. They demand a significant up-front payment: Be on the lookout for contractors who demand a significant up-front payment. For example, they may ask for more than a third of the payment upfront. Fraudsters are also more likely to ask for payments in cash.
  2. They are not registered or licensed: Under the Contractors’ Registration Act, home improvement contractors are required to register with the State unless they are exempted. Registration requirements may not apply to certain community and nonprofit organizations. However, you should remain wary of contractors that do not have a New Jersey Division of Consumer Affairs registration number.
  3. They try to talk you out of a contract: Beware of contractors who tell you a contract is not necessary for your home improvement project. According to the New Jersey Division of Consumer Affairs, you should require a contract for all home improvement projects, regardless of the cost.
  4. They list a P.O box instead of a business address: The New Jersey Division of Consumer Affairs warns against working with contractors who list a P.O box instead of a business address.
  5. They approach you without being sought out: Be wary of door-to-door contractors who claim they can give you a good deal. The New Jersey Division of Consumer Affairs warns against working with contractors you have not personally sought out.

Can an Attorney Help Me Avoid Contractor Fraud?

An attorney can help during a process of hiring and working with a contractor. For example, an attorney can review the contract terms and could conduct research associated with the project. If you do fall victim to fraud or if the contractor violates the terms of your contract, then you should speak with a Manalapan consumer protection attorney at Garland & Mason, L.L.C.

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