‘All of the bills had been bogus’: Protect yourself and get better results by doing some research before you hire a contractor [The News Tribune, Tacoma, Wash.]

July 07--Jerry Hicklin will be the first to admit if there's anyone out there who should know how to avoid being scammed, it's him. He had just retired from a 33-year career with the Seattle Police Department when he went looking for a contractor for the $350,000 remodel on his Lake St. Clair home east of Lacey two years ago.

When a neighbor two homes away employed a contractor Hicklin took notice. Hicklin says the contractor won him over with his personality.

"The greatest guy in the world. He can do everything. This was a dream come true," Hicklin recalled of the contractor.

First, Hicklin gave him $14,000. Then the contractor started giving Hicklin and his wife bills for everything from engineering to permits.

"He always had a answer for everything. A good answer," Hicklin says. In a short period of time Hicklin had turned over $65,000 and had practically nothing to show for it.

"We had an eight by eight hole in the ground and that's all we had." All of the bills had been bogus, Hicklin soon learned.

Homeowners are expected to spend $449 billion this year while they add that extra bathroom, rebuild a crumbling chimney or make a host of other home improvements, according to Harvard University.

That's a lot of money that contractors are eager to tap into. And while the South Sound has plenty of legitimate and honest contractors, every stack of lumber has its crooked two by four. In the shadows lurk shady contractors who lie, scam and cheat their way into trusting homes. Those homeowners are left with uncompleted work, stolen deposits or -- like Hicklin -- having to pay twice to fix the mess left behind.

But with precautions in place and a little homework remodelers can get their dream project without the nightmares.

THIEVES AND CON MEN

Thousands of crooked contractors are working in the state said Carl Hammersburg, Labor & Industries Fraud Prevention and Compliance Manager.

"They are the ones that know they are doing wrong," he said.

Using registered contractors is key, Hammersburg said. Shady contractors save thousands of dollars by misclassifying workers as independent contractors, even though they qualify as employees. They do this to dodge unemployment taxes, workers' compensation insurance premiums and wage laws.

Homeowners have no recourse should something go wrong, Hammersburg said.

Specificity in contracts is also key, Hammersburg said. The client might get two by fours when he expected four by fours. "On the surface it looks fine but it doesn't meet building codes," he said. Contracts can also list brands and models.

Contracts should also list the contractor's license number -- but be sure to check it out. Hammersburg said some crooked contractors will list a bogus number or another contractor's number (see sidebar on how to check those contractor numbers).

"I'm amazed at how brazen they are," Hammersburg said.

Like any good con men, criminally intent contractors use psychology to gain their victim's trust. Hammersburg said a shady contractor will come in to a neighborhood and do their first job superbly as a means to lure in neighbors. "Then they use that as the 'in' and start doing the door knocking," he said. But the work on the subsequent jobs is substandard. "They know how many people work off references."

CONTRACTS ARE KEY

Paul Hamilton, owner of Paul Scott Builders, is a Spanaway-based independent contractor with 28 years of experience. Hamilton prides himself not only on the quality of his work but his work habits as well.

"This is one thing I hear over and over: 'You guys are so neat and clean up after you're done. Most people I hire just leave a big mess', " he said.

Leaving a clean work area is something he puts in his contracts. Contracts, Hamilton said, are the key to avoiding misunderstandings if not outright fraud.

"Often, and I mean often, people get two or three bids and get totally different prices because they are not clear on how they want the project done," Hamilton said.

"Make sure that each contractor is bidding apples to apples. Are they using (undocumented workers) to do the work at a fraction of the price? If they are not licensed, bonded and insured the homeowner is taking a huge risk that could come back to haunt them," he said.

RESOURCES AT THE READY

A resource for consumers is the Better Business Bureau. The nonprofit organizes itself around its accredited members who uphold the group's standards and respond to clients' concerns. Its resources are available to the public.

Using the BBB resources consumers can check reliability reports and file complaints.

All of the businesses that are accredited members of the BBB undergo a background check, according to Niki Horace, vice-president of marketing and public relations for the BBB of Alaska, Oregon & Western Washington (headquartered in DuPont.) Accreditation means they have to be in business for at least one year, handle complaints appropriately and be licensed, bonded and insured.

However, consumers can use the BBB's database to pull up reports on any licensed business in the state whether the business is a member of the BBB or not.

The BBB's credibility is respected by consumers -- and by con men. Horace says misuse of the logo is widespread and a constant problem for the organization. They have a fulltime department that watches for inappropriate use of their name on everything from contracts to signage.

And as for online classified services such as Craigslist? Horace is not a fan.

"Anybody can post anything on Craigslist. And anyone can pose as anyone on Craigslist. They don't hold anyone responsible. I would not recommend Craigslist one bit," she said.

L&I's Hammersburg holds a similar dim view of Craigslist. "That place is the worst of the worst," he said. Prepaid cell phones and online classified sites have made it very difficult to pursue crooked contractors, he said.

FIGHTING BACK

When Jerry Hicklin realized he was being conned at Lake St. Clair he took action. He asked the contractor to return his last payment. When Hicklin tried to cash the $21,000 check the bank told him the account had been closed two years ago. Hicklin was expecting that and filed a report with the Thurston County Sheriff's Office. The contractor was soon arrested for fraud.

Today, the contractor is making monthly payments on the $21,000 bad check but Hicklin doesn't expect to see the more than $40,000 he had previously paid him.

Hicklin says the loss of money is painful but "what hurts the worst" is being an ex-police officer who got scammed.

Craig Sailor: 253-597-8541 [email protected]

SIGNS a contractor might be dishonest

Any one of the items below is not an automatic disqualifier. However, the more of these red flags you encounter the more caution and checking you should exercise. With that in mind, be wary of any contractor who:

--Gives a bid that's significantly lower than others you get.

--Is unable to provide references or satisfied customers.

--Uses any sort of high-pressure sales technique or pressures you into making a decision on the spot.

--Shows up with a work crew when all you asked for was an estimate.

--Claims there's a problem you didn't know about but can't offer proof of its existence.

--Offers an exceptionally long warranty.

--Offers to solve your problem with a "miracle" sealant or other similar product or aggressively steers you toward a product you don't want.

--Begins work before you sign a contract or doesn't provide a contract or written bid.

--Doesn't have their license number on contracts, business cards or other printed material.

--Wants the entire cost or a very large deposit up front.

--Wants to be paid in cash or doesn't charge sales tax.

--Wants you to pay the subcontractors directly.

--Claims to be an accredited member of the Better Business Bureau or uses their logo but is not a member.

--Wants to work only at nights or on weekends.

--Pressures the homeowner into getting the permits in the homeowner's name. FINDING A REPUTABLE CONTRACTOR

--Get at least three estimates. But first know what you want in terms of design and specifications.

--Verify that your contractor is properly insured and bonded.

--Find out if an action against the contractor's bond is pending, or has been taken in the past.

--Review information about previous companies a contractor may have operated.

--Don't be seduced by slick advertising or other marketing materials.

--Make visual inspections of the contractor's previous work.

--Make sure testimonials are legitimate and call the sources. Ask them questions about subjects that concern you (keeping the job at cost, finishing on time, etc.) and find out if the contractor was willing to fix problems.

RESOURCES

Washington State Department of Labor & Industry: www.lni.wa.gov; 800-647-0982. On L&I's website you can check a contractor's registration, bonding, insurance, workers' comp and legal complaints.

Better Business Bureau: www.akorww.bbb.org; 206-431-2222. Use the BBB's resources to check on consumer complaints.

Master Builders Association of Pierce County: www.mbapierce.com, 253-272-2112

Olympia Master Builders: www.omb.org; 360-754-0912

These nonprofit professional associations represent the building trades and provide referrals to the public.

GLOSSARY

Here are some terms and subjects consumers should be acquainted with before beginning their project.

Contractor -- Washington state law requires any work that "adds to or subtracts from real estate" to be done by a registered contractor. Maintenance work, such as lawn care and window washing, do not need to be registered.

Registration -- All working contractors registered with the Department of Labor & Industries must post a bond and carry liability insurance.

Bonding -- Allows a homeowner to sue the contractor in Superior Court if something goes wrong. The amount is $12,000 for a general and $6,000 for a specialty contractor. A performance bond in the amount of the job can also be obtained by the contractor but the consumer may have to pay a fee for it.

Insurance -- $1 million worth of liability insurance is required to cover damage inflicted during construction.

Workers' comp -- This covers injuries sustained on the job. Without it, a worker could potentially sue the homeowner for injuries. It's mandatory if the contractor has employees but waived if the owner is his or her own employee.

Contract -- While this all-important document is not defined by law, a comprehensive contract should contain:

--Total cost (including labor, materials and sales tax).

--Payment terms (including down and progress payments).

--The specific work to be performed and materials to be used.

--Warranties.

--Insurance and bonding information.

--License number.

--Time frame and consequences of missed deadlines.

--Specifics on cleanup.

--Change orders.

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Copyright (c) 2010, The News Tribune, Tacoma, Wash.

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