PROTECTING YOURSELF FROM CONTRACTOR FRAUD
presented by the law offices of frank d’amico, jr.

One of the unfortunate after-effects of Hurricane Katrina is contractor fraud. Your home is likely your most valuable investment. Simple steps will protect you from serious financial problems that can arise from working with unscrupulous contractors.

• Ask to see proof of a Louisiana Contractor’s License.
• Ask to see a copy of the prospective contractor’s Workers’ Compensation Insurance certificate. Workers’ Compensation
  Insurance ensures that you will not be held financially responsible if a worker is injured while repairing your home.
• For repairs that will exceed $50,000, make sure your contractor is bonded. Contact the bonding company directly to add your name to a bond for the job. If the contractor fails to complete the work according to the specifications in your contract, you will be compensated for any monetary loss.
• Ask to receive written estimates from contractors before signing contracts or making down-payments. Avoid offers that seem too good to refuse. Find out what neighbors are paying for similar work and check references.
• Make sure the payment schedule is based on the contractor’s performance. Never let your payments get ahead of the
  contractor’s work, and make sure the contract provides for a “retention” - ordinarily 10 percent - which you hold until the job is complete. You can also set up an escrow account with your bank where money to the contractor is available but not released until you sign off on the work or portions of the work. Check with local permit officials, builders’ associations, and the Better Business Bureau (BBB) if you have questions about specific contractors or want to issue a complaint (www.neworleans.bbb.org). You can also call the Louisiana State Attorney General’s Consumer Protection number at
  1-800-351-4889, or visit www.ag.state.la.us/.