Tips to help avoid home improvement rip-offs

Hiring a contractor to give a home a facelift for the New Year might be on a homeowner's to-do list this winter. However, hiring a contractor is a significant investment that requires extensive research.

To help homeowners make an informed decision when hiring a contractor and avoid becoming a victim to scam artists, Better Business Bureau offers valuable information for home project success.

In 2012, BBBs nationwide received over 5,000 complaints against general contractors, while Better Business Bureau Serving Central, Northern and Western Arizona received 140 complaints.

“While most contractors are reliable, there are those unscrupulous few who end up charging too much or not completing the job at all,” said Matthew Fehling, BBB president/CEO. “Knowing the red flags will help consumers choose a trustworthy contractor to help finish winter projects on time.”

BBB offers the following seven red flags to prevent home improvement rip-offs:

• Door-to-door solicitations — Unlicensed contractors who attempt to gain business by visiting door-to-door or through “cold calls” may not be with a local, established business, but instead might just be passing through trying to make a quick buck.

• Materials left over from a previous job — Be careful if a contractor shows up at your doorstep offering a cut-rate price on a project because they have leftover materials from a recent job, possibly from a neighbor's house or the house “down the street.” This is a common ploy of fly-by-night operators or handymen who are based out-of-state and use their pickup trucks as their place of business.

• Obtaining required building permits — If a contractor asks you to get the required building permits, it could be a sign they are trying to avoid contact with the local agency that issues such permits. Perhaps they are not licensed or registered with proper state agencies, such as the Arizona Registrar of Contractors. A competent contractor will obtain all necessary permits themselves before starting work on a project.

• Missing contact information — Be sure to check the contractor's contact information. At a minimum, require a working phone number and an address, then verify the information with BBB. The contact information should also match ROC records.

• High pressure sales tactics — A reputable contractor recognizes that consumers need time to consider all the factors involved in deciding which contractor to hire. Take the time to check references and verify professional designations and affiliations. Also, verify insurance, check licensing and bonding requirements with the ROC, and view their BBB Business Review. Obtaining three written estimates from different companies is also recommended.

• Upfront or cash only payment options — Whatever the reason, never pay for the entire project upfront. Make payments by credit/debit card or check as a credit/debit card statement or cancelled check can serve as proof of payment if needed. Do not make the final payment or sign an affidavit of final release until you are satisfied with the work.

• Borrowing from a specific lender — Be careful if your contractor suggests you finance a project with a particular lender or through their company.

If you do so, do not sign papers in a rush and make sure you read and understand the contract, particularly the small print. In some cases, consumers signed documents to later find out they had agreed to a home equity loan with a very high interest rate, points and fees. Instead, secure financing on your own by shopping around and comparing loan terms.

Consumers can check the status of a general contractor's license by visiting the Arizona Registrar of Contractors at www.azroc.gov.

For more consumer tips you can trust, visit BBB's News Center at www.arizonabbb.org.

Better Business Bureau has a Yuma office at 350 W. 16th St., Suite 205. Yuma County Director Janet Torricellas can be reached at 919-7940 or jtorricellas@arizonabbb.org.