With homeowners working away on their renovation projects before the rainy winter comes back, Better Business Bureau (BBB) is urging the public to use caution when hiring a contractor.
With similar numbers to last year, the BBB has received several local Scam Tracker reports about people losing thousands of dollars to contractor scams, primarily due to fly-by-night businesses using high-pressure sales tactics and demanding upfront fees.
These con artists find plausible reasons for consumers to give them money and will either deliver shoddy work, or no work at all.
“Homeowners should be extra cautious when hiring a contractor for their home renovation projects, given that 69 per cent of consumers who encounter this scam lose money, with a median average loss of $661. If you hire the wrong vendor, you could be facing a wide range of problems from unfinished work and damage to your property, to losing valuable time and hard earned dollars."
One homeowner from BC shared his experience with BBB this year, stating “[This] business owner drives around in affluent neighbourhoods in his truck and with his team of young men to solicit business to clean roofs and paveways, and promote other home improvement jobs. The contractor presents himself as an experienced and knowledgeable contractor, and takes advantage of unsuspecting homeowners.
"However, once I hired him, I experienced price gouging. He offered big promises with zero follow-up, and the service warranty is worth nothing. I have noticed he often changes his company names. He will print new promotional cards but the business address is always non-existent or false.“
Consider these tips when hiring anybody to work on your home:
- Research and gather information.
- Search for a contractor’s Business Profile at BBB.org for free information on their business, review verified reviews, see if there is a history of complaints,and find out if they are an Accredited Business. BBB Accredited Businesses make a commitment to uphold BBB's accreditation standards including: to build trust, advertise honestly, tell the truth, be transparent, honor their promises, be responsive to their customers, safeguard privacy and embody integrity.
- Also do a web search for the name of the company online along with the words "Complaint", "Review" or "Scam" to find different results.
- Ask the company if employees and sub-contractors undergo a background check. Are they trained and certified? What identification will they show when they come to your home?
- 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 may contact. Ask the references about the services performed and their overall experience with the contractor and the quality of the work. Ask if the contractor stuck to the estimated budget and completion date for the project. If possible, inspect the contractor's work yourself.
- Ask for multiple quotes. You should always shop around and get at least three quotes from different businesses. Make sure all bids consider the same set of criteria. Remember that the lowest bid may not necessarily be the best bid; if one bid is significantly lower than the others, the contractor may be cutting corners or may not understand your work requirements.
- Get it in writing. Always get estimates in writing and never let any work begin without a written and signed contract. Do not be pressured into signing an agreement before you are ready and make sure you read and understand everything before signing.
- The contract should include contact information, start and completion dates, a detailed description of the exact work to be done, any material costs, payment arrangements, and warranty information.
- Specify who is to obtain necessary building permits and who is responsible for clean-up.
- Make sure all verbal promises are included in the contract.
- You may also ask how much work will be subcontracted and ask for information on the subcontractors.
- Ask questions if you do not understand any part of the contract. Never sign an incomplete or partially blank contract.
- Verify license and insurance. Always be sure that the company you decide to work with has the necessary licenses and insurance to work in your region.
- In Canada, requirements differ from province to province. Search for information specific to the province where you are having the work done. The Industry Training Authority (ITA) is a great place to start to understand what types of contractors require licences and your local BBB can help.
- You will also want to ensure their contractor insurance is up to date. Once you have your contractor’s insurance information, call the carrier to confirm appropriate coverage for worker’s compensation, property damage, and personal liability in case of accidents.
- Confirm building permits. Your contractor must have the correct permits before starting your project. They will usually obtain the permits, but you will probably pay for them. That should be detailed in your contract. Request that all final inspections be completed by the local building official prior to final payment.
- Inquire about a lien waiver. In many Canadian provinces, there is a Builders Lien holdback, so ensure you understand any financial obligations you may be liable for.
- Think about future warranty/service issues. Make sure you are aware of your warranty coverage and how to deal with service issues. Ensure you know who to contact and how to reach them for future warranty issues.
- Arrange a payment schedule. Never pay in full up front. Stagger your payments so your final payment is not due until the work is complete and you have had it fully inspected. Do not pay cash; make sure your check is written to a company, not an individual, or that you use a credit card. Paying with a credit card will provide some recourse should the job not be completed as stated in the contract.
- Get a receipt. Request a receipt marked “Paid in Full” when the job is completed and your final payment made. You may also request written confirmation of deposit payments made along the job process.
- Keep your contract. Hold on to your contract for future reference, warranty details or if any questions arise after the work is complete.
For more information on your home project, visit BBB’s Your Home HQ.
The Better Business Bureau has empowered people to find businesses, brands and charities they can trust for over 110 years.
In 2021, people turned to BBB more than 200 million times for BBB Business Profiles on 6.3 million businesses and Charity Reports on 25,000 charities, free at BBB.org.
Local, independent BBBs can be found across the United States, Canada, and Mexico, including BBB Serving Mainland British Columbia, which was founded in 1939 and serves Mainland BC and the Yukon territory.