Consumers Beware When Contracting for Disaster Repairs

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Release date: 
April 2, 2001
Release Number: 
1360-22

Tupelo, MS -- State and federal disaster recovery officials advise Mississippi residents who have disaster--related damage to be extremely careful when hiring contractors to clean up and repair their homes and businesses.

"Scam artists are often ready to seize an opportunity to capitalize on the misfortune of others," John D. Hannah, FEMA federal coordinating officer, warned.

The following suggestions are offered:

Use reliable, licensed contractors: Check with your Better Business Bureau or local business trades council to make sure the firm has no outstanding consumer complaints against it.

Get a written estimate: Be sure to obtain a written estimate for the job and read the fine print. Compare the services and prices of several reputable contractors before making a final decision. Hire local contractors if possible.

Check references: Call former customers who had similar work done to make sure they were satisfied with the job.

Proof of insurance: Make sure the contractor carries general liability insurance and workers' compensation. If the contractor is not insured, the homeowner may be liable for accidents that occur on the property or to the house/building.

Ask for a written contract: A complete contract should clearly state all the tasks to be performed, all associated costs and the payment schedule. Never sign a blank contract or one with blank spaces. Make sure the contract clearly states who will apply for the necessary permits or licenses. Have a lawyer review the contract is substantial costs are involved. Keep a copy of the signed contract.

Written guarantees: If the contractor provides any guarantees, they should be written into the contract clearly stating what is guaranteed, who is responsible for the guarantee and how long the guarantee is valid.

Pay by check: Avoid on--the--spot cash payments. The safest route is to write a check to the contracting company. A reasonable down payment is 30 percent of the total cost of the project. Federal law requires a three--day "cooling off" period for unsolicited door--to--door sales of more than $25.

Canceling a contract: Canceling a contract should be done within three business days of signing. Be sure to follow the agreements stated in the cancellation clauses. Send the notification by registered mail.

Have work inspected: If excavation work is being performed (e.g., sewers or basement walls) make sure a qualified observer inspects the work before it is hidden from view to avoid problems in the future.

Leon Shaifer, the state official in charge of the recovery efforts, urged consumers who have been victims of fraud to contact the Mississippi Attorney General's Office of Consumer Protection at 1--800--281--4418.

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