The Federal Trade Commission recently launched a consumer education publication that aims to protect homeowners from falling victim to home-repair rip-off artists.

The publication, “After a Disaster: Repairing Your Home,” urges homeowners to take the following precautions when hiring contractors:

  • Deal only with licensed and insured contractors;

  • Verify the track record of any contractor you are thinking of hiring by calling their recent customers, your area Better Business Bureau and Home Builders Association, insurance agents, and claims adjusters;

  • Get recommendations from family, friends, and co-workers;

  • Take your time signing a contract – don’t automatically select the lowest bidder, and make sure you fully understand any price variations. Ask a knowledgeable friend or attorney to look over your contract before you sign, and be sure to get a signed copy of the contract before work begins;

  • Verify that there is no cost for an estimate before letting anyone into your home;

  • Resist dealing with a contractor who asks you to pay the entire cost of the job up-front – a deposit of one-third of the total amount is standard – and pay the final amount only after the work has been completed to your satisfaction. Never pay cash;

  • If you take out a loan to pay for repairs, be wary of using your home as collateral. If you do not repay the loan as agreed, you could lose your home; and

  • Be wary of contractors who encourage you to spend a lot of money on temporary repairs – make sure you have enough money for permanent repairs.

If you suspect a home repair rip-off, contact the Consumer Division of your State Attorney General’s Office. If you suspect fraud, waste or abuse involving Federal Emergency Management Agency disaster assistance programs, report it to FEMA’s Inspector General’s Office.

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