How to Protect Yourself from Contractor Scams
At 9:49 in
3 Scams Contractors use to Con Customers & How to protect yourself
What happens here
To protect against contractor scams, the presenter offers key advice: 1. **Never let the contractor hold all the power (money).** Avoid large upfront payments that exceed the value of work completed or materials delivered. 2. **Ensure contracts are meticulously detailed.** This includes explicitly listing items that *are not* included in the scope of work to prevent unexpected change orders. 3. **Understand the entire scope of work.** If a contractor needs your money to finance their project, it might indicate financial instability. The presenter advocates for contracts that keep the contractor more invested in the project than the customer is financially committed.
Goal: Implement strategies to safeguard against various contractor scam tactics.
Tools and materials
- Contract N/A — Defining the scope of work, payments, and exclusions to prevent disputes
- Due Diligence N/A — Researching contractor history, skills, and financial stability
- Payment Structure N/A — Managing cash flow to ensure the customer retains leverage
- Money — Compensation for contractor services, managed to maintain financial control