Scams affecting consumers are common in nearly every industry, including the roofing industry. While no one wants to be swindled in any capacity, the high cost of a new roof can mean those who fall victim to roofing scams can lose a tremendous amount of money quickly.
And since roofing repairs – particularly if there is extensive damage – must be done promptly, consumers often have less time to research and vet any potential roofing contractor. These conditions have led to an increase in fraudulent activities in the roofing industry.
If you need a new roof or repairs to your existing roof, it is worth taking the time to educate yourself about some of the more common roofing scams that can be encountered.
Huge Down Payment, Then Disappears
Many unethical contractors will require a down payment, then disappear without completing the work that was promised. While this sounds like an easy scam to spot, many consumers are swayed by an argument that these funds are needed to help with the initial materials cost.
And in fact, many insurance companies will issue a check directly to the homeowner if there is a claim. This is generally to cover the initial payment, which leads many homeowners to believe a large down payment is standard practice when, in reality, it is not.
Reputable contractors generally don’t require a large down payment, and if they do request an initial payment, it is often not more than 10%.
There exist no legal requirements for when the fees for materials and labor are levied. The only way to know for certain that this won’t happen is by working with a contractor that does not require an initial down payment.
Storm Chasers
Storm chasers are often the most publicized type of roofing scam. In this scenario, “contractors” arrive at areas that have been recently hit by severe weather. They then distribute information about their “company” or visit neighborhoods that have been hit particularly hard by the damage. Often times offering free inspections and reduced rates. Sometimes, they will even justify rates by citing a deep concern for a community in need.
Once they’ve identified clients, storm chasers will often base their price on the square footage of the roof to estimate the insurance payment. They will then put on a cheap or poorly constructed roof. These roofs are the bare minimum and are usually not built in a manner that restores the roof to its condition before the weather event.
Unfortunately, these roofs generally last only 5-7 years. By the time the homeowner realizes what’s been done, the storm chasers have disappeared leaving no legal recourse. In fact, they usually aren’t insured or licensed.
The best way to avoid this scam is by requesting a copy of the roofing company’s proof of insurance and license. You may also be alerted to potential fraud if the company uses high-pressure sales tactics, are difficult to find online, are unable to produce local references, or have an out-of-state license plate.
Door-to-Door Salespeople
Door-to-door salespeople often follow a similar system as storm chasers. They will offer a free inspection to a vulnerable community (such as senior citizens), but during this inspection, they will create damage if it doesn’t exist, thus ensuring an insurance claim will be accepted.
These salesmen are generally trained to sell hard, and they know how to spot vulnerable populations. In many instances, the roof does not need to be repaired or replaced, or the damages reduce the full value of your roof. Additionally, filing a claim can cause you to lose your insurance or suffer a rate hike.
They will then replace it with a roof of poor quality, leaving the homeowner disadvantaged. While some door-to-door salesmen may be legit, it’s best to exercise extreme caution before hiring them and to have your insurance company inspect the roof before signing any paperwork.
Elevator Ride
This scam is sometimes referred to as the fluctuating bid scam too. In this scenario, the scammers target individuals who may not know a lot about roof replacement. Then they offer them a deal that’s too good to be true. It will be far lower than other companies in the area.
However, once the work begins, “unexpected costs and unforeseen problems” will continue. Additional increases upon increases over the original quote will occur. In severe instances, shady contractors will threaten to walk from a job. This leaves the homeowner with no roof if they do not pony up additional money. By the time this scam is done, the homeowner ends up paying far more than they anticipated.
A price that is far below other companies should serve as a red flag for this type of scam. Roofing material does experience minor price fluctuations, but usually nothing that will blow a hole in any budget.
Further, any fluctuations should be assumed by the contractor, not the homeowner. It’s a good idea to analyze the contract for verbiage that outlines how this situation will be dealt with under these circumstances. The one area that may truly cause a job to cost more is the roof decking. This is because it can’t be assessed before starting work.
But usually with reputable companies, they will also address this scenario in the contract, and the industry standard is to charge approximately $1.50 more per square foot to replace decking, if necessary.
Other Roofing Scams to Avoid
In addition to the outlined scams, other tactics include using high-pressure sales techniques, overcharging for services, providing unnecessary repairs, and delivering an inadequate repair or roof. Homeowners can often spot red flags that indicate a scam may be in the works.
The most frequently cited ones include:
- Asking for cash upfront (81%)
- Reluctance to provide proof of insurance (79%)
- No physical business location or permanent phone number (73%)
- Will not sign a contract (70%)
No matter what type of roof you have – whether it be polyurethane foam roofing or shingles, you may fall victim to potential scammers, but there are some key tips to protecting yourself.
- Work with only well-established companies.
- Request licensing and insurance information.
- Get multiple local references from the company.
- Look up reviews.
- Speak with multiple contractors before hiring one.
- Take as much time as you need to make a decision.
- Monitor your roofer’s progress closely.
- Avoid any company that requires a down payment.
Falling victim to a scam can potentially be extremely costly, so take your time and select a contractor that is transparent as possible.