2020 was a year of extremes on many fronts. But just by focusing on storm fronts, experts tell us that the United States experienced $ 22 billion in separate weather-related disasters last year. At the time of writing, the Texas Insurance Board expected the state's extreme weather in February 2021 to result in the largest damage outbreak in Texas history.
The only sectors that see this as anything but tragic? Shady entrepreneurs and direct fraudsters.
After extreme weather events, dubious entrepreneurs come down to affected communities and offer quick, cheap solutions for battered homes and businesses or quick removal of debris. They want payment in advance or are trying to persuade you to overwrite a payment from your insurance company.
Usually, these "storm chasers" are shady contractors and overloaded for fuzzy work – which, depending on local licensing rules, may not cover homeowners' insurance. Others are direct fraudsters who take the money and run. Some search for older homeowners, perceiving them as more confident, more likely to have a large nest egg and more likely to have memory or cognitive problems they can exploit.
HOME IMPROVEMENT COATS
Sometimes unscrupulous contractors are in jail with fraudsters who pose as public insurance adjusters who charge high fees for "damage assessments" and then target the shady contractor. it is not limited to that. All year round, especially in hot weather, it is not uncommon for contractors to show up without the house doors uninvited. They say they happen to do some work in the neighborhood and noticed that your house needs repairs as well. They offer to fix the roof, rearrange the driveway or perform other repairs or renovations for what sounds like a good price. The homeowner is asked to pay in advance for the work, then the contractor disappears without having done anything.
These are the precautionary measures we offer consumers in our education and outreach measures to detect and avoid entrepreneurial fraud.
- Do your research before accepting offers on contractor services that come to you – by phone, from your doorstep or by mail. If you need an entrepreneur, proactively explore your options.
- Request a bid in writing and compare bids from multiple contractors before approving any work.
- Insist on seeing references and checking that the contractor is licensed to work in your state. Make sure they bear responsibility and compensation for workers.
- Get a written contract before you pay any money and before the work begins.
- Do not pay in cash. The Federal Trade Commission recommends that you use a check or credit card or arrange financing (but not through the contractor; they may try to talk to you about taking out a mortgage or reverse mortgage and arrange for the lender to pay them right away – rogue all incentives to do the job good or even complete it).
- Do not deposit a large deposit. The initial payment should not exceed one third of the total estimate, to be paid on the day the material arrives.
Entrepreneurial fraud is a year-round phenomenon, but with extreme weather events reversing, we can expect entrepreneurial fraud to increase immediately.
Home Improvement Scams Tips Sheet
3 Ways to Detect a Home Repair Fraud
Anyone who has information about insurance fraud or vehicle theft can report it anonymously by calling toll-free 800.TEL.NICB (800.835.6422) or submit a form on our website.
Content with permission from the National Insurance Crime Bureau.
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