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Protecting yourself from scam artists

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By Maryellen Garrison

While we were lucky this time, many Kentuckians have lost a lot as a result of the March 2 tornadoes. As those hit the hardest begin to piece together their lives and rebuild, they should be on the lookout for those who may want to prey on their misfortune. Many times, after an area has been hit by a natural disaster, it will see an influx of scam artists and fly-by-night contractors, so take heed and keep these pointers in mind in case we are ever hit again.

Consumers can do several things to prevent becoming the victim of a scam or unscrupulous contractor. The Kentucky Attorney General says you should be wary of cash for the entire job up front as this is a common practice among scam artists. Often, they will take your money and leave before starting or finishing a job. Another red flag is contractors who drive vehicles with out-of-state license plates and ask extremely low prices for repair work.

The attorney general’s Disaster Fraud Task Force suggests that communities recovering from tornados implement a registration program for potential contractors. Such a system would include contractors’ information, require them to display a registration certificate at the work site and publicize the program so consumers know to require their contractor be registered. This can help decrease the number of unscrupulous operators in your area.

You can use these tips from the attorney general’s office to further protect yourself against scam artists and fly-by-night contractors:

  • Use local companies or repairmen.
  • Check out unfamiliar companies through the Better Business Bureau.
  • Demand a written contract.
  • Get estimates for repair work from several contractors.

When deciding on a contractor, make sure the contractor is licensed, bonded and insured. The contractor needs to have proof of liability coverage and workers’ compensation coverage in case any workers are injured on the job.

Workers’ compensation coverage is required by state law for companies with even one part-time employee, but many companies still do not have this insurance, as carrying both it and liability insurance can be expensive for employers. If a company doesn’t have workers’ compensation coverage, and one of its employees is injured on your property, the employee can sue you.

To protect yourself, ask a potential contractor to give you the name of their insurance company and contact the insurance company to make sure the contractor is covered for both liability insurance and workers’ compensation. Ask the insurance company for a certification that shows the contractor’s coverage. The certification will have the policy number on it in the event of an accident. Homeowners can contact the Security and Compliance Division of the Kentucky Labor Cabinet at (800) 731-5241 for any workers’ compensation related questions.

If you suspect someone is a scam artist or fly-by-night contractor, you should contact local law enforcement. You can also call the Disaster Fraud Hotline at (855) 450-5645 to report price gouging or fly-by-night contractors.