Flood Victims Reminded to Use Caution When Hiring Contractors

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Release date: 
July 16, 2008
Release Number: 
1755-025

AUGUSTA, Maine - The Federal Emergency Management Agency (FEMA) and Maine Emergency Management Agency (MEMA) remind individuals to exercise due diligence when hiring contractors.

"Disasters can unfortunately attract scam artists," said Ginnie Ricker, state coordinating officer for MEMA. "Residents should take care when selecting contractors to perform repair work to avoid being victims of fraud."

FEMA and MEMA are offering some practical guidelines for homeowners:

  • Use reliable, licensed contractors. Exercise due diligence. If you've had positive experience with local contractors previously, start there or ask for referrals.
  • Check references. Contact contractor's former clients to find out their level of satisfaction with the work.
  • Ask for 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.
  • Get a written estimate. Get more than one contractor to give you an estimate. Insist on getting a written estimate that includes everything you expect of the contractor. Generally there is no fee for an estimate.
  • Insist on a written contract. A complete contract should clearly state all tasks to be performed, all associated costs, the payment schedule and guarantees. Consider having a lawyer review the contract if substantial costs are involved.
  • Obtain a local building permit, if required. Contact your local municipality for details regarding the permit(s) required for the work you intend to do.
  • Have work inspected. Make sure all work is completed as agreed upon in the contract before you sign any completion papers or issue final payment.
  • Pay by check. The safest way to pay is by check. A reasonable amount for a down payment is 30 percent of the total project cost.
  • Canceling a contract: If necessary, canceling a contract should be done within three business days of signing the agreement. Be sure to follow the agreements stated in the cancellation clause(s) in your contract. Send the notification by registered mail with a return receipt for the contractor to sign.
  • Get a receipt: Ask the contractor for all receipts related to your project.

Consumers who have issues regarding contractors should contact the Consumer Protection Division at the Maine Attorney General's office at 207-626-8800 or online at www.maine.gov/ag. To report fraud, call the FEMA Fraud Hotline toll-free at 866-720-5721.

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