Northern Alberta Institute of Technology

How to protect yourself against fraudulent renovations contractors

Referrals, contracts and instincts are key, says former Troubleshooter Julie Matthews

julie mattews, former global troubleshooter, consumer protection advocateWith the home-renovation season in full swing, Edmonton homeowners are warned to watch out for shady contractors all too eager to take the money and run.

And the frequency of scams increases through the summer and into the fall, says Julie Matthews, a local consumer protection expert and former Troubleshooter with Global Edmonton.

“There’s a lot of smaller, good contractors who are on the up and up and very qualified, experienced people,” says Matthews (Radio and Television ’95). But she’s heard plenty of horror stories over the years.

Many of those so-called renovators have no qualifications and no talent. And some of them are absolute rip-off artists, Matthews says.

She recalls one Troubleshooter segment about a single mother who, after saving up money, paid a contractor a deposit of more than $15,000 to renovate an old rural home. He cashed the cheque immediately and started the work, but abandoned it at a point where the woman and her kids could no longer live in the house.

Once that feature aired, people came forward with donations and some honest contractors stepped up to finish the project.

“This is an ongoing thing,” Matthews says. “Nice people and nice contractors shouldn’t have to step up.”

“It’s up to consumers to really do their homework."

Ultimately, “it’s up to consumers to really do their homework, get everything in writing, and read the contract carefully before signing to make sure you’re doing everything you can to protect yourself.”

Here are a few of Matthews’ tips that might save you from falling prey to a questionable contractor.

Get referrals. Ask family, friends and neighbours for a renovator they can vouch for.

Required reading on reno scams

Service Alberta, where Matthews now works as a senior investigator, offers a tip sheet on home renovations.

The Canadian Home Builders' Association also has renovation fact sheets as well as a list of certified industry members.

Get at least three detailed estimates. The devil is in the details, so be sure to get written estimates that specify exactly the work, materials and time involved, says Matthews. “Getting multiple quotes will help you weed out the ones that could be a problem. Ask about their experience, ask for photos of projects they’ve done.” Check out those projects in person.

Call the Better Business Bureau. This a great database to find out whether customers have had problems with a contractor’s work. Matthews is also a big believer in screening the contractor via the internet for any pattern of complaints or red flags.

Check for Workers' Compensation Board coverage. If a company doesn't have proper coverage and a worker is injured on your property, you could be liable.

Cover the details in a contract. “Make sure you know what materials you’re going to be getting,” says Matthews. “And is the person you’re speaking to the one who’s actually going to do the work, or do they contract it out? What kind of timeline are you looking at? Some consumers will … pay the money and then the contractor will say, ‘Oh, you’re okay if I don’t start until October, right?’ And now you’ve already paid them.”

renovations contractorKnow your rights. Any contractor who solicits, negotiaties or concludes a contract at a consumer's home needs a prepaid contracting licence from the Government of Alberta if they are to accept any payment before the work is finished. Homeowners can cancel a contract within 10 days of receiving it, and they can also cancel if there is any misrepresentation by the company they hire.

Ask plenty of questions. If you get a bad feeling, walk away.

Trust your instincts. Ask plenty of questions, says Matthews. If the contractor is being cagey, maybe hesitant to write anything down, and you get a bad feeling, walk away. “I’ve talked to so many consumers over the years who have told me after the fact: ‘You know, something just didn’t seem right but I thought, oh, he seems like such a nice guy.’

"If I had a dollar for all of the times I’ve talked to a consumer that’s been taken advantage of by a nice guy, I would be a multimillionaire. Because the worst contractors out there are the best talkers.”

Report trouble

It’s important that homeowners report any incidents of suspected renovation fraud, Matthews says.

“That’s because some of these people are predators and they are changing their company names, sometimes they are using different aliases. If people don’t come forward and report it, there is no way to keep them from [doing] it to someone else.”

Homeowners should first go to the company directly with any complaint. If that doesn't fix things, they can contact the Better Business Bureau for possible mediation or arbitration assistance, or they can file a complaint with Service Alberta and its consumer investigations unit.


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