Don't Get Scammed by a Bad Contractor

When you ask Sally Lloyd and Christina Prete what they think of their home-improvement contractors, one word comes up: scoundrel.

Lloyd, in Freeport, N.Y., and Prete, in Wallingford, Conn., had different contractors, but they got the same results. Their bathrooms were torn apart and the jobs were unfinished.

"He seemed like a nice, honest person," Prete told "Good Morning America."

But the man wasn't registered as a contractor in Connecticut. He took her $2,200 deposit and took off.

That kind of behavior by contractors like the one Prete originally hired isn't surprising to Edwin Rodriguez, the commisioner of the Department of Consumer Protection in Connecticut.

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"Chances are there's a reason why they're not licensed or registered. And it may well be because the workmanship is not good," Rodriguez said.

His state is cracking down. For the past five years, Connecticut has staged contractor stings.

Investigators have set up shop in homes and invited illegal contractors to come in and submit bids. When the deal is done, the contractors are busted.

The technique seems to be working. So far the state has nabbed more than 400 contractors.

Richard Maloney, a Connecticut director of trade practices, says at least 10,000 more contractors have registered since the stings began.

National Epidemic

Bad contractors are a nationwide problem.

Home improvement ripoffs rank as one of the most common complaints to consumer agencies, according to Elizabeth Owen of the National Association of Consumer Agency Administrators.

Connecticut isn't the only place using stings to try to control the problem. California uses them; so does the Texas Department of Licensing and Regulation.

There was so much repair work to be done after last year's Atlantic hurricane season that police in south Florida actually set up highway checkpoints to check contractors' licenses.

In Florida, homeowners can get fines or even jail time for hiring unlicensed contractors.

Connecticut has no such law. Consumer protection commissioner Rodriguez believes there are two main reasons why illegal contractors have flourished. One is price; another is a lack of consumer awareness.

"They don't realize that these home improvement contractors need to be registered. And secondly, [illegal contractors are] probably the ones that are out there low-balling their numbers," Rodriguez said.

Ironically, the illegal contractor Christina Prete used was not the low bid. She says she chose him partly because his bid was in the middle of those she received. But she admits it never crossed her mind to ask about his state registration.

"Surprisingly, I didn't do any research on that, " she said. "We did ask him if he had insurance and he did present us with insurance so we just went along with that."

Prete was lucky. She sued her contractor in small claims court. She won but he still didn't pay.

She was able to get reimbursed from Connecticut's state compensation fund, because the contractor had been registered within the past two years. But other states provide no compensation if the contractor is illegal.

Likewise, unregistered contractors may not carry workers' compensation or liability insurance. That means if someone gets hurt on the job, the homeowner may be liable for damages.

Illegal contractors also cannot get necessary work permits or have their work officially inspected.

How to Protect Yourself

Consumer advocates recommend that you always ask to see the contractor's license or registration. If he's legitimate, he should have no problem furnishing it.

Verify the document with the governmental agency that issued it.

Check the contractor's record with your local consumer protection agency and better business bureau.

And check with local courts to see if he has a history of being sued.

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