Tips to avoid tag fraud

OWENSBORO, Ky. (WFIE) – In the past few months, multiple cases have been reported of people losing thousands of dollars after hiring a contractor for a home remodel that was never completed.

[Affidavit: Hopkins Co. man arrested for stealing woman’s blank check, forging signature]

Mark Schmidt has over 40 years of contracting and remodeling experience in Owensboro.

He is now retired but would like to share his knowledge with anyone who has an upcoming project.

“Whether the project is $5,000, $10,000, or $75,000, it’s a big investment,” Schmidt said. “You must do everything in your power to protect yourself.”

Schmidt says that you should first find your contractor from a reputable source. Word of mouth from a friend isn’t always enough.

“The best place to find a contractor is at your local homeowners association,” Schmidt said. “Most associations have pre-approved contractors.”

So you hire your contractor, what next?

“Make sure they have a local business license,” Schmidt said. “Following up is easy, you can call your local billing department to find out if they have a local business license.”

Then check if they have liability insurance and workers compensation insurance for their employees in case they get injured.

“It protects your home if something happens on the construction project that damages your property,” Schmidt said.

One of the most important steps, Schmidt says, is to make sure there’s a contract.

“Everything has to be put in writing,” he said.

He says it has to be specific. Everything from the number of sockets to the number of coats of paint.

Especially the payment plan.

“The entire job costs as much money as how much you’re going to pay off and when you’re going to pay it off,” Schmidt said.

Schmidt says despite what some people say, not having to pay anything up front is unrealistic, but for most average remodels, a small down payment will do.

“You can get by with a 20 or 30 percent down payment, which would cover most materials ordered,” he said.

So when preparing for a remodel, says Schmidt, do your homework.

“There is no one out there who can protect them, they have to do it themselves,” he said. “There are resources out there to protect them.”

If you have been the victim of fraud by a contractor, your best bet is to report it to the police. There is no guarantee that you will get your money back, but it will help the authorities find it and put a stop to it.

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