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Watch out for these schemes
A salesperson comes to your door saying that she was in your neighborhood and noticed that you needed siding, storm windows, or some other
improvement. She tries to convince you to sign a contract for home improvements on the spot without revealing hidden finance charges or the fact that there will be a lien placed on your home.
A salesperson comes to your door and says he just did some work for your neighbor. He has some extra material that is just enough to repave
your driveway or reshingle your roof. He says he can do the work very cheaply if you let him do the work that day. He takes payment in advance to do the work, then disappears. Or he does the work and
it's so sloppy you wish he had disappeared.
An ad appears in the newspaper saying, "You can get cash fast if you are a homeowner." To get the money, you must sign papers
transferring title to your home, and to get it back you must pay a very high (and very illegal) interest rate.
Be a Wise Consumer
Here are some tips to keep you from becoming a victim of a home improvement scam.
Be leery of a salesperson who appears at your door uninvited. Be skeptical of any claims made about energy savings or security that will
result from the company's improvements.
If you are asked to sign a credit check application, read the form carefully and make sure it does not bind you to anything. Make sure it
really is a credit check and not a contract. If you do not understand everything in the document, do not sign it until you have had someone else explain it to you.
Don't rush into signing a contract, especially in your home. If the salesperson offers a really good deal, it will be available
tomorrow. It is difficult to read a contract when a salesperson is pressuring you to sign on-the-spot, so take time to read the contract after the salesperson leaves. If they will not leave a copy of the
contract for you or insist you must sign now, it should be a warning not to do business with them.
Do not sign a contract that has blanks. Unscrupulous salespeople sometimes fill in numbers that are different from what had been agreed to
orally.
Make sure everything promised to you is in the written contract. If the salesperson promises you something, he should be willing to put it
in writing. If he won't, it should be a warning to you that the company may not stand behind its word. Get a copy of anything you sign, and keep it.
Remember, any home improvement contract you sign must contain the following warning next to the space for your signature:
Important Notice: You and your contractor are responsible for meeting the terms and conditions of this contract. If you sign this
contract and you fail to meet the terms and conditions of this contract, you may lose your legal ownership rights in your home. Know your rights and duties under the law.
If you sign a contract containing this language and you fail to make the payments, the company can take away your home. Therefore, it is
extremely important that you understand exactly what your obligations will be under the contract, and that you are confident you can meet those obligations. If you have any questions or doubts, consult
an attorney before you sign the contract.
If there will be a lien on your home, make sure a notary is present to witness your signature. A notary other than the salesperson must be
present to witness you sign the document creating the lien. It should be a warning to you if the salesperson does not have a notary present or if he says he will take care of the notarization later.
Ask for references of satisfied customers and call them before signing a contract. If the company is unwilling to give references, they
must have something to hide. Even if they do give references, the "references" sometimes turn out to be people who are paid to say good things about the company. If possible, look at examples
of work done previously.
Do not sign a completion certificate until the work is complete. Be wary of repairmen who say they need to be paid before the work is
complete. Before signing the completion certificate, personally inspect the work that was done to make sure it was done properly and is really finished. It is not unusual for contractors to ask for
partial payment as work is completed. Then, be sure to verify that the work you are paying for is finished. Also, ask for written assurance that any sub-contractors have been paid by the contractor for
their work.
Beware the "low-ball" bidder. Some home improvement contractors bid a very low price on the work to be done. Once you accept the
offer, however, you find that many items you assumed to be covered by the bid are not included. Be sure any written bid itemizes all of the work to be done and is specific. Do not assume that something
not included in the bid is included in the price, even if it seems trivial. Get more than one bid. If one bid seems much lower than the others, make sure all contractors are offering to do the same
quality work. Question any bid that seems out-of-line. Make sure the contractor is not taking shortcuts to lower the estimated cost. Ask, in advance, what the contractor charges for change orders. Do not
assume that the contractor will do extra work for the cost of the work alone. Many legitimate contractors add a service charge on top of the cost of the work.
Compare prices by shopping around. Many home improvement contractors will have you sign a credit contract to pay a certain price plus a
finance charge, then immediately sell the right to collect it for 20-50% less than the contract price. That usually means you could have gotten the work done for 20-50% less by paying cash or arranging
financing yourself. Other contractors simply charge outrageous prices, hoping you won't find out until after you have signed the contract.
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