In 2013, it was estimated that one-third of Canadian homeowners would spend an average of $15,000 doing home improvements. Factor in that seven out of 10 Canadian households own the home they live in, and you’ve easily got a multi-billion dollar reason for home improvement fraud.
Listed as one of the Top Ten Scams by the Better Business Bureau, home improvement fraud not only can hit you in the wallet, but where you live too. Protect yourself with a little bit of research, caution, skepticism and some good old-fashioned common sense.
Remember, if it sounds too good to be true, it probably is.
Types of Home Repair Fraud
There are some tried-and-true schemes that you should watch out for as a homeowner:
Wow, is that all it will cost?
Beware of people showing up unannounced at your door offering up one-time deals that are too good to pass up, discounted, and that won’t be available to you tomorrow, in an attempt to get you to commit today. Don’t get pressured into making a decision you’ll regret later.
Who sent you to my doorstep?
Think twice about people who show up at your door, unsolicited and unexpected, saying that they’ve been sent by your home insurer, hydro company, heating utility or some other company. Unless you reached out and initiated first contact to set up a visit, no reputable company would show up on your doorstep unannounced.
What’s wrong with my house?
Be leery of people who approach you and tell you that they’ve noticed a problem with your home; a serious problem that needs to be fixed right away. This play on your emotions is designed to get you to commit to a project on the spot, and hopefully (in the eyes of the fraudster) hand over a cash deposit. Before acting, get a second opinion.
My home insurance will cover it, really?
Home insurance does not cover home improvements, renovations, or maintenance. If anyone suggests otherwise, they’re probably trying to get you to commit to a bigger (read: more expensive) project after which you’ll be left paying out of pocket.
What’s the harm?
Remember, nothing is free, so if someone shows up at your door offering to do a free home inspection be cautious and on guard. This free inspection often results in the person telling you that there is a major problem and that needs to be fixed immediately. Of course, they’ll fix the problem for you; all that’s needed to get started is a cash deposit. Your best option is to get a second opinion.
Home Repair Fraud Tips and Red Flags
- Anyone who presents a business card that lacks an address, or any sign of legitimacy such as a licence number for contractors, should be approached with caution. If a salesperson or contractor comes to your home offering to do work for you, it’s important to see some evidence of a legitimate business before you even consider any repairs.
- If you are approached by anyone claiming to be associated with your insurance company, a building inspector, or any other authority, ask to see his or her identification. Legitimate representatives of insurance companies and inspection companies do not approach homeowners without some prior contact.
- Be wary of anyone offering a too-good-to-be-true deal on home repairs.
- Never hand over a cash deposit on the spot to anyone you don’t know; con artists will take the cash and disappear.
- If your home really is in need of repair, get several estimates before you come to a decision.
- Research the company offering to do any repairs before you sign a contract or agree to have any work done. Check references! Don't skip this step just because you’re busy or "they seem like the right person." Call previous clients to ensure that you are making the right decision.
- Don’t feel pressured to sign any contracts; anyone who insists on an immediate decision is unlikely to be trustworthy. Take your time reviewing any contract you are asked to sign, and have someone else look it over as well.
If You Suspect Home Repair Fraud
If you believe you have been a victim of home repair fraud, report it. According to the RCMP, nine in 10 Canadians who are victimized by fraud don’t speak to anyone about it. Fraud can happen to anyone, anywhere regardless of age or income; so there is nothing to be embarrassed or ashamed of—in fact, fraudsters are banking on you not reporting it. Don’t let them win.
Contact your insurance company if someone claiming to represent their interests ever approaches you.
Report fraudulent activities to your local authorities. You can call the police department, or make an anonymous tip through services such as Crime Stoppers, the Insurance Bureau of Canada, or the Canadian Anti-Fraud Centre.
Reporting home repair fraud helps to prevent others from becoming victims in the future, and gets con artists off of the streets. Always report suspicious behaviour, even if you are not certain fraudulent activity is at play. It’s better to be safe, than sorry.