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FTC Consumer Alert
After a Disaster - Hiring a Contractor

If your house has been damaged by a natural disaster — snow/ice, fire, flood or earthquake — a reputable contractor can help you get your home repaired. Unfortunately, disasters sometimes bring out home repair rip-off artists, who overcharge, perform shoddy work and often leave without finishing the job.

What can you do to find a quality contractor? The Federal Trade Commission and the Federal Emergency Management Agency offer the following tips:

Be wary of builders or contractors who go door-to-door selling their services, especially those who are not known in your community or offer reduced prices because they’ve just completed work nearby and claim they have materials left over.

Deal only with licensed and insured contractors. Investigate the track record of any roofer, builder or contractor you’re thinking of hiring. Get a list of recent satisfied customers from any prospective contractor. Ask friends, relatives, neighbors, co-workers, insurance agents or claims adjusters for recommendations. Also check with your Better Business Bureau to see if complaints have been lodged against any contractor you’re considering.

Don’t let anyone rush you into signing a contract. Get written estimates from at least three firms. Ask contractors if there’s a charge for an estimate before allowing them in your home. Ask for explanations of price variations. Don’t automatically choose the lowest bidder. Get a copy of the final, signed contract.

Beware of contractors who ask you to pay for the entire job up-front. Never give a deposit until you’ve done your homework. When you make a down payment, it should not be more than one-third of the total price. Pay only by check or credit card — and pay the final amount only after the work is completed to your satisfaction. Don’t pay cash.

Be skeptical of contractors who encourage you to spend a lot of money on temporary repairs. Make sure you’ll have enough money to complete permanent repairs. Be cautious about using your home as security for a home improvement loan. If you fail to repay the loan as agreed, you could lose your home. Have a knowledgeable friend, relative or your attorney review a contract before you sign. If you get a loan to pay for the work, consider having these documents reviewed as well.

If you suspect a repair rip-off, call the consumer division of your state Attorney General. If you suspect fraud, waste, or abuse involving Federal Emergency Management Agency disaster assistance programs, you can make a confidential report to FEMA's Inspector General's Office. You can file a complaint with the FTC by contacting the Consumer Response Center by phone: toll-free 1-877-FTC-HELP (382-4357); TDD: 202-326-2502; by mail: Consumer Response Center, Federal Trade Commission, 600 Pennsylvania Ave, NW, Washington, DC 20580; or through the Internet, using the online complaint form.

Although the Commission cannot resolve individual problems for consumers, it can act against a company if it sees a pattern of possible law violations. The FTC publishes free brochures on many consumer issues. For a complete list of publications, write for Best Sellers, Consumer Response Center, Federal Trade Commission, 600 Pennsylvania Ave, NW, Washington, DC 20580; or call toll-free 1-877-FTC-HELP (382-4357), TDD 202-326-2502.

Produced in cooperation with the Federal Emergency Management Agency.

The FTC website is http://www.ftc.gov