Fix-It Follies

To avoid being suckered on home renovations and repairs, homeowners are typically advised to hire licensed contractors (not those guys in dented pickups who knock on your door looking for work). Check references and get a contract, experts say.

But that still may not be enough.

Charles Cerquitella, 58, of suburban Philadelphia did those things before hiring a contractor for a new $5,000 backyard patio. "I got references from him, and they all checked out," says the retired government worker. "But after he got my $3,800, all he did was remove my old patio without installing the new pavers I paid for."

The lesson learned: "Getting references from a contractor means nothing if you don’t know and trust those people," Cerquitella says. "I could have been calling his brother-in-law, for all I know."

Doreen Cameron, 58, who lives near Cerquitella, also did her homework before hiring the same contractor, who took her $8,600 down payment for driveway repair. He ripped up the driveway but didn’t finish the work. She and Cerquitella are among 40 people duped out of $430,000 before the contractor declared bankruptcy.

"When I checked with the Better Business Bureau, it showed no complaints against him, so I hired him," she says. One step Cameron could have taken first was to call the county courthouse. She would have learned that a dozen lawsuits had been filed against the contractor for getting payment in advance and not completing jobs.

Home improvement fraud is the most common scam in the country, according to the National Association of Consumer Agency Administrators and the Consumer Federation of America.

Once you’ve been ripped off, it’s next to impossible to get your money back. Even so, make a report to your state attorney general and the Federal Trade Commission.

There are ways to steer clear of fix-it fraud.

"Never pay any upfront money to a contractor who says he needs to buy materials before starting the job," says Tom Silva, a contractor on the PBS TV show This Old House. "Reputable contractors have a credit line for materials." Don’t pay anything until after the first day of work—then pay one-third. Pay the rest only after the job is finished.

Silva’s other suggestions:

Get recommendations for contractors from a local building inspector. "They know who does quality work in your area," he says. Ask at specialty lumberyards and plumbing and electrical supply stores, where reputable contractors are likely to buy materials.

Consider a "penalty clause" in the contract that deducts a percentage from the cost if the repair isn’t completed by the designated date.

The FTC says beware of "contractors" who don’t list a business number in the phone directory, accept only cash payments, pressure you to sign immediately or ask you to get the building permits.