For anyone considering home renovations, the Better Business Bureau recommends that citizens exercise caution when hiring a home improvement contractor.
Home improvement scams in 2020 ranked third in the Better Business Bureau’s Annual Canadian Risk Scam Tracker Report. The report used a three-dimensional approach to measure scams: exposure, susceptibility, and monetary loss.
According to the BBB, home improvement scams had a low exposure rate of just 2.9%, but the sensitivity rate was high at 73.9%, with consumers losing an average of $ 1,000.
The two main scams, respectively, were advance fee lending and online shopping.
Like home improvement scams, advance fee loans had a low public exposure rate of 6.2%, but a high vulnerability rate of 71.1%. The average loss was $ 1,400.
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Online shopping had a much higher public exposure rate of 33.7% and a high sensitivity rate of 75.4%. However, the average median loss was much lower at $ 116.
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The BBB says home improvement scams often see scammers acting as sub-contractors to offer low prices or a short time frame to complete renovations. Bogus entrepreneurs use high pressure sales tactics and ask for money up front to manipulate the victims.
“Home improvement scams can start with a knock on the door, a flyer or an ad. Sometimes scammers hide in front of home improvement stores and in other cases they’ve set up fake websites and business social media accounts, ”BBB said.
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“Scammers find plausible reasons for consumers to give them money and either deliver poor quality work or no work at all.”
Citizens across Canada have reported losing thousands of dollars in home renovation scams last year.
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According to the BBB, a victim in Nanaimo lost $ 18,000 as a result of a home improvement scam.
BBB tips for avoiding home improvement scams include:
- Research and collect information
- Say No to Cash Transactions and High Pressure Selling Tactics
- Find the entrepreneur’s business on BBB.org
- Ask for references and check them
- Avoid cutting round corners.
“Hire the right (contractor) and you can relax knowing your project is in good hands,” said BBB spokesperson Karla Laird.
“Rent the wrong one and you could be faced with a wide range of issues ranging from unfinished work and damage to your property, to wasted precious time and thousands of dollars. ”
For more information on the BBB Scam Tracker Risk Report 2020, on the Better Business Bureau website.
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