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Money March 2015

Dollar Sense

Home Repair and Improvement Scammers Target the Elderly

By Teresa Ambord

If you believe you have been a victim of a home repair/improvement scam, it’s important to contact an attorney immediately. There are time deadlines to pursue some legal claims, and to cancel sales contracts. You can also contact your state Attorney General, your county District Attorney, or the Department of Financial Services for insurance-related scams in your area.

It begins with a knock on your door.    

The details vary, but according to warnings from the police, it goes something like this. You open the door and find a young man dressed like a laborer.

“I was just doing a home repair job up the street,” he tells you. “I noticed your rain gutters are dangerously full, did you know that? It looks like you’ve got some real trouble brewing there. The gutter problem might’ve even caused roof damage. I’m on my way home but I can clean those gutters for you right now if you want. While I’m up there, I can take a look your roof.”

The damage he mentions may or may not be real. But if he manages to alarm you, you may see this as a quick and affordable way to fix a problem before disaster strikes. Often the con artist acts like it doesn’t matter to him, but he wants to do you a favor and is willing to give you a great price. Plus you like this friendly young man and you figure it’s a win/win situation.

Beware, say the authorities, because this has the earmarks of a home repair/improvement scam. Chances are, the “deal” is not so good, and the price is much higher than the job is worth but he’s counting on you to not know that. Also, the work, which he describes as urgent, may never get done or the work may be shoddy, and he may have little or no experience in home repair.

And… this might be only the beginning.

This is exactly what happened to one 98-year-old man in Indiana.

Billy Smiley answered the door and found a likable man there, who offered to clean his gutters and check his roof. Smiley agreed, and paid the man $3,000 (far more than the job was worth). Soon the repairman was back, knocking on the door again, looking concerned.

“Now that I’ve been up on the roof and taken a closer look, this is a much bigger job than I thought.” Smiley then agreed to more work for more money. Actually, while an accomplice did the job, the repairman came in and kept the lonely senior company, pretending to form a friendship. Somehow he got a look at Smiley’s bank statements, and decided Mr. Smiley could afford to lose a lot more money. Before long, an afternoon’s work turned into a 15-day job with a $76,000 price tag. Plus the repair man stole $20,000 in jewelry from Smiley’s house, all while pretending to be interested in a lonely old man. 

“They made it sound like they were doing me a favor,” Smiley later told reporters. Why did he let it escalate? At first, they won his trust. Then he was in too deep. “I had to rely on their honesty. And once I got into it, it was one of those deals where you can’t just walk away from it. They had my roof torn off, and the weather was bad. I needed them to get it fixed.”

But they didn’t. When Smiley caught on to the scam, he stopped paying, and the men left. Smiley had to hire someone else to fix his roof…which may not have even been damaged in the first place. “I have no one to blame but myself,” said Smiley. “It’s one of those things I’ve criticized others for doing – for not investigating guys like that before doing business with them.”

He warns people to use legitimate contractors and to not trust someone who just knocks on your door. In addition, if someone claims to be a licensed contractor, ask to see his/her contractor’s license, and proof that they are adequately insured. One more thing… take a look at the contractor’s vehicle. Does it have marketing signs on it? A phone number? Copy down the phone number. And keep in mind, if the marketing signs are of the magnetic, stick-on variety, this could be part of the scam.

The men were apprehended and went to prison. But that wasn’t much consolation for Billy Smiley.

 

It’s Nothing New

According to authorities, the home repair scam is everywhere. Often, it targets the elderly, especially after a storm or other disaster when damage is apparent and homeowners are likely to feel desperate. Adding to the desperation is the fact that many legitimate contractors are swamped with work right after a storm, so homeowners start looking around for other answers. And then… a friendly looking guy wearing a tool belt knocks on the door.

Here are some of the warning signs to watch for, so you can avoid a home repair/improvement scam:

  • The repairman comes to your door to solicit work.
  • He may say he has materials left over from another job (like roof shingles) and can therefore offer you a discount.
  • He makes the job seem urgent, pressuring you to make a quick decision.
  • He talks fast, uses terms that may be confusing, and does not stop to explain when you ask questions.
  • He does not offer references that you can check.
  • He may drive a vehicle without a business name painted on it. Conversely, there may be a name on the vehicle, but it is a removable magnetic sign, which may be used to deceive victims. His vehicle may have out-of-state plates.
  • He may resist giving you a written contract but expects you to trust him, offering a handshake to seal the deal.
  • Or, alternatively he may pressure you to sign a written contract immediately, without time to consider the job or to check out his credentials.
  • The only contact he offers is a P.O. box for an address and a cell phone number.
  • If permits are required, he may ask you to get them, which is a sign he is unlicensed.
  • He wants payment upfront, possibly in cash, before the work has begun. He may tell you the money is required for materials.

What if you suspect you have been victimized?

If you believe you have been a victim of a home repair/improvement scam, it’s important to contact an attorney immediately. There are time deadlines to pursue some legal claims, and to cancel sales contracts. You can also contact your state Attorney General, your county District Attorney, or the Department of Financial Services for insurance-related scams in your area.

 

“Another True Story: “The Older, the Blacker, the Better”

Recently the crime show “American Greed” told the story of two brothers — John and Daniel Sullivan. The Sullivans made a fortune by targeting older people, especially African American seniors in Chicago, using home repair and improvement schemes. When seeking victims, they said they had a policy, “the older the better,” and “the blacker the better,” though it’s not clear why race was a factor.

They canvassed the streets of Chicago, door-to-door, offering home repairs and improvements. After numerous complaints were lodged against them, the brothers’ business was banned from operation in the city. So the Sullivan brothers simply changed their business name to J&D Home Services, and kept on prowling. That’s when they met Clementine Thacker.

Thacker and her husband bought their home in 1953 and paid it off. When he passed away, she needed more income and decided to rent out the two upstairs apartments of her home. The apartments had sat vacant for a long time, and needed some repairs. That’s when she met a representative of J&D Home Services who was canvassing the neighborhood.

The salesman pushed her to get a home equity line of credit (HELOC), but she refused. Instead, she insisted on a personal loan. No problem, said the man, then he provided her with a loan application which she signed.

It wasn’t until later that she learned he’d used some trickery to make her think the application was for a personal loan, when it was actually for a HELOC.

The work on her home began, but nothing was ever completed. She was left with a shoddy paint job, an incomplete bathroom rehab, and a newly installed banister that pulled right out of the wall when used. “American Greed” described the J&D scam philosophy as “one nail, no jail.” In other words, they did just enough to prevent criminal exposure, even if they did have civil suits.

The bottom line was, Thacker still had two apartments she couldn’t rent, a $63,000 loan she couldn’t afford, and a loss of equity in her home.

“They were good thieves, good liars and good thieves” she told “American Greed.”

Eventually the Sullivan brothers went to prison for 14 years each, and were ordered to pay more than $700,000 in restitution to victims. What happened to Thacker? Rather than enjoying a restful retirement she is busy making crafts to sell, hoping to earn enough to pay the loan payments on a home she and her husband had paid off decades earlier.

 

Teresa Ambord is a former accountant and Enrolled Agent with the IRS. Now she writes full time from her home, mostly for business, and about family when the inspiration strikes.

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