Irene's Waters Recede; Scammers Come Out Of The Woodwork

Homeowners who found themselves in the sights of Hurricane Irene may soon be targeted by scammers looking to profit from their pain.

As attention turns to repair and rebuilding, residents in affected areas should be aware that disasters often attract unscrupulous contractors who will prey on those trying to put their lives back together.

The National Consumer Law Center reported in late 2008 that complaints about contractor fraud to the Louisiana Attorney General's office leaped to 6,000 in the two years after Hurricane Katrina, from about 150 a year prior to the storm. The counterpart in Mississippi received more than 800 reports of fraud.

One common scheme is for scam artists to ask for an up-front payment and never show up to do the work. A survey by Louisiana State University found that was the case for 61 percent of respondents who had been victims of contractor fraud in the three years after Katrina.

Another big concern is contractors who use poor-quality materials and cut corners, pocketing the price difference from what it would cost to make proper repairs.

And the scams don't come cheap: 15 percent of respondents to the LSU survey said they lost between $10,000 and $30,000.

The most common problems come when homeowners hire unlicensed contractors who hang signs advertising low-cost work or head to an affected area after a disaster.

"We call them storm chasers," said Cheryl Reed, director of communications for the consumer website Angie's List. "Those are people trying to make a buck off of somebody else's misfortune."

One common tactic is for contractors to go door-to-door and offer to help. "It's easy when people are upset and they want to get this started," said Loretta Worters, vice president of the Insurance Information Institute. "You're so distraught that you don't really think about the implications."

Although homeowners may feel pressured to find someone to make the essential repairs, a sense of urgency can make them more vulnerable. Slowing down and taking the time to check a contractor's credentials and references can save time and money in the long run.

Here are some tips to help ensure you hire a contractor who will do the job properly:

1. Be suspicious of any contractor who tries to rush you to make a decision, especially on non-emergency or temporary repairs.

2. Send away quickly any contractor who claims to be backed by the government. The Federal Emergency Management Agency does not endorse individual contractors or loan companies.

3. Ask to see the primary contractor's driver's license and write down the number and the license plate number of his or her vehicle. Also ask to see the contractor's proof of liability and worker compensation insurance. Make sure anyone you hire is licensed and bonded, or you could be at additional risk for liability, should the contractor have an accident on the job.

4. Never let a contractor discourage you from contacting your insurance company.

5. Beware of contractors who encourage you to spend a large sum on temporary repairs. Payments for such repairs are covered as part of the total insurance settlement. If you run up a big expense for temporary fixes, you may not have enough money for the necessary permanent repairs. Discuss what's needed with your insurance agent or claims adjuster. And remember to keep receipts.

6. Ask friends and neighbors for recommendations or get a list of reputable contractors from your insurance agent or company representative. Check out candidates on online forums, and with the Better Business Bureau, your local home builders association, consumer affairs department and your state attorney general's office before signing a contract. Never give anyone a deposit until after you have researched their background.

7. Don't pay for work up front. Most contractors will require a down payment, but that should just be a portion of the total bill. And don't pay anything until you have a written contract. Never sign a contract with blank spaces, which a crooked contractor can alter after you've signed the document.

8. Beware of price gouging. While prices often rise as demand increases, you should report exorbitant hikes to local authorities. Get all terms in writing; that includes prices for labor and materials, a precise description of the work to be done, time schedules, guarantees, payment schedules and estimated start and finish dates.

9. Don't pay with cash and don't sign over an insurance settlement check to the contractor. Using checks or credit cards creates a record of your payments, which will be helpful if there's a dispute.

10. Never pay a contractor in full or sign a completion certificate until the work is finished and you are sure the work satisfies current building codes.

11. Report suspected fraud to local authorities. Also, report anyone who encourages you to fabricate an insurance claim to your insurance company, the local police, the state insurance department or the National Insurance Crime Bureau hotline at 1-800-TEL-NICB.


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Comments are posted from viewers like you and do not always reflect the views of this station.
  • by MICHELLE Location: ENC on Sep 20, 2011 at 05:57 PM
    I would like to see a story about the homeowners trying to con the insurance companies. As part owner of a small construction company, we are experiencing a lot of potential customers wanting us to do illegal practices so that they can get more money. We don't want any part of this. Also, we have a friend (an elderly lady) who had an agreement with a different company to strip, repair, and trim her ceiling in her living room that fell during Irene. They are now trying to sheet rock over the broken plaster ceiling (with the popcorn texture) for the same amount of money as the original agreement and only do half of the work. How can someone sleep at night trying to scam an honest senior citizen out of money thinking that she didn't know any better about how the work should be done? These people are a disgrace.
  • by Sam Location: Kitty Hawk on Sep 1, 2011 at 12:49 PM
    I'll be on the lookout for those scumbags. There will be NO WAY I'll give any money upfront to anybody before they begin the work. NO WAY JOSE! If they want money upfront, then they wont get my business.
  • by D Location: Havelock on Sep 1, 2011 at 06:21 AM
    Yes, there is a Tree removal companies going around from "out of state (SC)" that are charging an outrages price to remove damaged trees. Beware
  • by Obama Snake Oil Co Location: Washington on Sep 1, 2011 at 05:48 AM
    Yep, Bev is touring the state and Obama is back from vacation to come here...wait, nope, he will go to Rhode Island and the NE. They need to watch for this guy and gal. They offer hope and change and then remove both of them. It costs you trillions of additional debt for your children to pay with nothing to show for it. Both are professional con artists....
    • reply
      by Dark Horse on Sep 1, 2011 at 12:10 PM in reply to Obama Snake Oil Co
      Just what does your comment have to do with the story? There you go again.
  • by Anom. Location: Kinston on Sep 1, 2011 at 04:41 AM
    Got bitten by one yesterday and so did my across-the-street neighbor. Beware of two guys riding around in a truck who offer to replace missing shingles or repair other visible damage for a moderate fee. They will continue to find problems that increase the initial estimate of how much the repairs will cost. The lead guy will hand you a business card that dosen't have his name on it but does have the name of a repair business. Be careful! They are scam artists.
    • reply
      by chill Deep run on Sep 1, 2011 at 03:33 PM in reply to Anom.
      Watch out for a roofer name Ray in Kinston.
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