Protect Yourself from Contractor Fraud

OKLAHOMA CITY – As Oklahoma residents repair and rebuild their properties after the April 19-20 severe storms, those hiring a contractor should proceed with caution and heed the warning of local and state emergency management officials.

When selecting a contractor, you should keep these tips in mind:

• Do your research. Potentially fraudulent contractors will usually come to you to offer their services — either at your door, on the phone or through email — so be especially wary of solicitors.
  • Don’t offer personal financial information over the phone. Know who you are dealing with and always ask for identification.
  • Get estimates from multiple contractors and your insurance company.
  • Ask for references from past customers.
  • Ask who will be performing the work (often, the contractor is a “salesman” and may subcontract the work to inexperienced individuals who are paid in cash for the contractor to avoid paying taxes).
  • Make sure contractors have the proper licensing and are bonded.
  • Ensure contractors obtain the necessary permits to do the job.
  • Verify insurance. Contractors should have disability and workers’ compensation insurance. If they don’t, you may be liable for accidents on your property.
  • Whenever possible, deal with local contractors who have roots in your community, and independently verify any address or other contact information the contractor provides to you.
  • Ask family, friends, coworkers or others whom you trust for contractor referrals.

• Use the Better Business Bureau, www.bbb.org, and internet search engines. Fraudulent firms change names frequently, so search the web for their address and phone number, and include terms like “review,” “scam” and “complaint.”
  • Demand satisfaction. Don’t sign completion papers or make final payment until the work is done correctly.
  • Don’t wire money or use reloadable debit or gift cards. There is no legitimate reason to use this form of payment.
  • Do not hire a contractor without a written agreement that includes all relevant details, including any guarantees, warranties, promises made by the contractor and specific start/end dates for the project and how to negotiate changes and settle disputes.
  • Take a picture of your contractor, their vehicle and license plate, business card and driver’s license.
  • If your project involves roof repair, make sure that the contractor is registered with the Oklahoma Construction Industries Board (www.ok.gov/cib or 405-521-6550).

If someone offers these services to you, they could be potentially fraudulent:

• The contractor claims to have materials left over from a previous job and offers to use them on your project for a steep discount.
• The contractor requires a substantial upfront payment and/or payment in cash.
• The contractor uses high-pressure sales tactics to push for a fast decision or does not take “no” for an answer.
• The contractor offers a discount on your project if you can refer other customers.
• If a deal sounds too good to be true, it probably is. Use your best judgement.

When looking for a contractor, stay patient. Research companies and resist the urge to make quick decisions in the moment. If you feel you have been defrauded by a contractor, report your concerns to your local law enforcement agency. You can also call the FEMA Disaster Fraud Hotline at 866-720-5721 that is available 24-hours a day, or report the potential fraud to Oklahoma Attorney General Consumer Protection Unit at 833-681-1895 or ConsumerProtection@oag.ok.gov.

For the latest information visit fema.gov/disaster/4706. Follow the FEMA Region 6 Twitter account at twitter.com/FEMARegion6 or on Facebook at facebook.com/FEMARegion6/.