Are you looking to repair storm damage, update your kitchen, or make essential improvements to your home or business in Wisconsin? Choosing the right contractor is crucial. However, the growing problem of contractor fraud is making this decision a nightmare for many residents.
Wisconsin residents are especially vulnerable to scams after severe weather conditions. In the past year, the U.S. experienced 28 disastrous climate events, with almost $98 billion in losses. Storm chasers looking to take advantage of homeowners are becoming more prevalent in Wisconsin.
Scammers often present themselves as legitimate contractors, preying on stressed homeowners in need of urgent repairs. The consequences can be severe, leading to unfinished work, subpar repairs, and financial loss.
In this article, we’ll explore common types of contractor fraud in Wisconsin and provide expert advice from Jeff Lieberman, the Director of Anti-Fraud and Recovery at Central Insurance, on how to protect yourself from falling victim to these scams.
Understanding Theft by Contractor Fraud in Wisconsin
Contractor fraud in Wisconsin involves contractors taking payment for a project but failing to complete the work or misusing the funds. This can lead to civil lawsuits and criminal penalties for the contractors.
Under Wisconsin law, contractors must hold payments in trust for the project, using the funds for labor, materials, and services related to the job. Deviating from this can result in criminal charges of theft by contractor.
Scammers often target Wisconsin residents after severe weather events, such as hailstorms or heavy snowfall, creating an urgent need for repairs that fraudulent contractors exploit.
Here are key points to keep in mind after storm damage, according to Lieberman:
- Storm Chasers: Scammers lack local presence and reputation, often lacking proper licensing and insurance.
- Urgency and Pressure: Scammers use high-pressure tactics to push for immediate decisions and payments.
- Low Initial Bids: Fraudulent contractors may provide low estimates to win over homeowners, leading to inflated costs later.
Lieberman advises contacting your insurance carrier after damage and researching contractors to avoid falling victim to scams.
Six Warning Signs of Contractor Fraud
Recognizing warning signs of contractor fraud is essential, especially after major weather events. Here are six red flags Wisconsin homeowners should be aware of:
1. Unsolicited Offers
Be cautious of contractors who show up uninvited, especially after a storm. Legitimate contractors don’t typically solicit work door-to-door.
2. Demands for Large Upfront Payments
Scammers often request large upfront payments, while legitimate contractors ask for reasonable deposits tied to project milestones.
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