5 Contractor Rip-Offs to Watch For


When dealing with remodeling contractors, homeowners can encounter the entire spectrum of humanity: from honest, hardworking tradespeople to scam artists looking to make a quick buck. But without being a licensed electrician, plumber, or carpenter, how can consumers tell good work from bad? Luckily, unethical contractors aren’t the most creative lot, and their misbehavior tends to fall into certain predictable patterns.

If you are a homeowner or otherwise hire someone to perform work, here are 5 common Rip-Offs to watch out for.


Scope Creep

If a contactor has agreed to replace your kitchen countertops, but when he’s done you find yourself paying for electrical work and a plumbing repair, then you’re the victim of Scope Creep. Unscrupulous contractors see a small job as a foot in the door, and then find reasons to tack on additional work at inflated prices.

The Protection: Especially with remodeling projects it’s impossible to know in advance everything a job will entail, and it can be totally legitimate for a contractor to have to expand the scope of work once the job has started. In fact, if a newly discovered problem isn’t addressed, you may have an emergency on your hands when those leaky pipes in your wall finally burst, or a termite infestation spreads. However, any increase in cost should be explained to you before the work is done and any options thoroughly explained. An honest contractor will want to earn more business by her quality of work, not by gouging you.

(Incidentally, the flip side of Scope Creep is the homeowner who is always trying to add more items “as long as you’re in there”. i.e. “As long as you’re in there working on the bathtub, can you put a new ceiling light in? Oh, and the kitchen faucet leaks too, can you handle that?” If you ask for more work, you should be willing to pay for it.)


The Sub-Contractor Shuffle

Common on larger jobs, this scam involves dumping your project onto a smaller operation, who in turn dumps it onto someone else, who in turn….  well, you get the picture. The people who finally show up to your home have never seen it before, aren’t familiar with your vision, and are getting paid a fraction of what’s going to come out of your wallet. As a result, the quality of work will be inferior and you’re not sure who to hold accountable.

The Protection:  It’s common and acceptable for contractors to use subs. However, if you have a contract with a specific company, a direct employee of that company should be on the job site at least long enough to verify the quality of work being done, and that company should fully warranty any work done in the scope of that contract. Make sure that you have that specified in writing, and you don’t have to worry about who is actually swinging the hammer.


The “If Nobody Sees it, Then Nobody will Complain” Mentality

Every project runs into problems, and every contractor will make mistakes. How they deal with those mistakes distinguishes skilled tradesmen from hacks. An honest contractor will show you the problem, explain it so that you can understand what’s happening, and either make the needed adjustment, or consult with you on your options on how to proceed. (And not just charge you more; see the Scope Creep rip-off.) A scam artist will slap something together and throw up a bandaid so quickly that the home-owner will never see the problem. Poorly run plumbing, hazardous electric, and unsound framing can all be hidden behind drywall and a coat of paint.

The Protection:  The first step is to ask questions. If something doesn’t look right, call your contractor out on it. Even if there’s a valid explanation, this puts the contractor on notice that you’re actually examining the work. On larger or more complex projects, the best protection is to make sure that your contractor is pulling permits and getting inspections by the appropriate local authority. Ask any contractor and you’ll hear plenty of examples of City inspectors demanding excessive alterations to work which serve no practical purpose, and it’s true that these sort of demands can increase the cost of your job significantly. But you must balance out this potential inconvenience with the security of knowing that your home was inspected by an unbiased third party.


The Punch-List Put-off

At long last-- the project is done! Well, almost. There’s just a few things left to finish off, but everything’s so close to being done that you’ve given your contractor the final payment, and he’s going to come around on Monday to punch it all out. Or maybe next week…

Most remodeling contracts specify payment is due on “substantial completion”, which means that you can’t withhold the bulk of payment because there’s a little bit of touch-up paint, or a cracked outlet cover to be replaced. However, contractors looking to rip-off unwary homeowners will pocket your check and walk out never intending to finish off their work. And in a tight economy, even honest contractors can be tempted to put off doing work that they’ve already been paid for.

The Protection: A partial “hold-back” on final payment is customary on Punch-list items. To determine the amount of hold-back, roughly double the value of the work to be done, with a minimum amount of a couple hundred dollars. For example, if your contractor needs to finish off $150 worth of work, hold $300 until it’s completed. This provides plenty of incentive to finish the work, while not holding grossly more money than is warranted.


Warranty Abandonment

Most contractors offer some kind of warranty on their work, often for a year after completion. But depending on your contractor’s level of professionalism, it can be a very difficult task getting someone out to your house to make good on that warranty. You may get a range of responses, anywhere from lengthy arguments about whether a specific item is covered to simply ignoring your calls. Either way, your contractor has found a way to rip you off even long after everyone’s left the job site.

The Protection: Unfortunately, the only real protection is to research your contractor thoroughly before you make any commitments. Do some on-line research, check with the Better Business Bureau and any appropriate trade organizations, and above all, ask for referrals. A smart contractor realizes that warranty work is actually great customer service, and won’t hesitate to make any and all legitimate repairs in a prompt and professional manner.