Avoiding Fraud in Home, Business Flood Repairs

Main Content
Release date: 
March 14, 2000
Release Number: 
1320-11

Frankfort, KY -- State and federal disaster recovery officials urge Kentucky flood victims to be careful in choosing contractors for repair of homes and businesses damaged by the severe storms and flooding in February.

"People should be on guard against dishonest contractors who promise more than they can deliver or who charge exorbitant prices," said W.R. Padgett, director of the Kentucky Division of Emergency Management.

"Consumers can avoid being scammed by transient contractors and fly-by-night remodelers by dealing with reputable local or area businesses," said Kentucky Attorney General Ben Chandler. "Most contractors are reputable, hardworking individuals. But some people try to take advantage of urgent repair needs in the wake of a disasters."

Cases of suspected fraud should be reported to the Commonwealth attorney general office's Consumer Protection Division at 502-696-5389 and to the Federal Emergency Management Agency at 1-800-323-8603.

Padgett suggested taking these steps before hiring a contractor:

  • Check on the firm's reputation. The Better Business Bureau, homebuilders' association or trade council are good sources of information. Ask if the firm in question has had unanswered complaints filed against it.

  • Ask for proof of insurance. Be sure that the contractor has disability and workers' compensation insurance. If the contractor is uninsured, you may be liable for accidents on your property.

  • Ask for references. Contractors should be willing to provide names of previous customers. Call some of them and ask if they would hire the contractor again.

  • Ask for a written estimate. Make sure it includes everything you expect the contractor to do as well as costs for taxes or other fees. Some contractors charge for an estimate, which is understandable because they're very busy after a disaster.

  • Ask for a written contract. Never sign a blank contract. State all tasks to be performed, all associated costs, the payment schedule, and who is responsible for applying for necessary permits and licenses.

  • Ask for a written guarantee. This states what is guaranteed, who is responsible and how long the guarantee is valid.

  • Pay by check. Avoid on-the-spot cash payments.

  • Cancel quickly. If necessary you may cancel a contract within three business days of signing, being sure to follow contract cancellation clauses.

Information on how to rebuild so as to reduce damages in future disasters can be obtained from your local building department, by calling FEMA at 1-800-480-2520, or by going to the FEMA Web site, www.fema.gov.

Last Updated: 
July 16, 2012 - 18:46
State/Tribal Government or Region: 
Back to Top