May 10, 2021

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Better Business Bureau warns of home improvement & tax scams

(WXYZ) — The Better Business Bureau is sounding the alarm on home improvement & tax scams so you don’t waste your money.

Tax Scams

· IRS or CRA Impersonation Scams

o Tax scams are among the most stubborn cons out there. They reappear often, each time with a slightly different spin. The main theme is scammers posing as the Internal Revenue Service (IRS) in the U.S., trying to trick you into either paying up or sharing personal information.

o These scams most often start with a phone call and take two basic forms. In the first version, the IRS “agent” says you owe back taxes and pressures you into paying by prepaid debit card or wire transfer. If you don’t comply, the scammer threatens you with arrest and fines. In the other version, scammers claim they are issuing tax refunds and ask you for personal information so they can send your refund. This information can later be used for identity theft. Scammers also use this approach to target college students by claiming a “federal student tax” has not been paid.

o These imposters often go to great lengths to appear real. The scammer may give a fake badge number and name. Your Caller ID may look like the call is coming from Washington, D.C. or Ottawa. Con artists sometimes follow up scam calls with an email, which uses the IRS logo, colors, and official-sounding language. In many instances, these scams start with a serious and official sounding “robocall” recording.

o You are pressured to act quickly. Scammers typically try to push you into action before you have time to think. The IRS will give you the chance to ask questions or appeal what you owe. Also, their first contact with you will always be by mail, not phone or email. Payment must be made by wire transfer, prepaid debit card, or other non-traditional payment methods. These methods are largely untraceable and non-reversible. The IRS and CRA will never demand immediate payment, require a specific form of payment, or ask for credit card or debt card numbers over the phone.

o In the U.S., the IRS may call you about outstanding debts after reaching out by mail. See BBB’s tips on IRS calls to tell if the IRS is really calling or if you are talking to a scammer.

Home Improvement Scams

· Use caution when hiring a home improvement contractor. Scams abound, especially following a major storm, flood, or other weather event when many homeowners are trying to repair their houses. But contractor scams can happen any time, so be wary of high-pressure sales tactics, upfront fees, and fly-by-night businesses. Con artists will take homeowners’ money and deliver slipshod work… or no work at all.

o How a scam might work?

§ Home improvement scams can start with a knock on the door, a flyer, or an ad. The contractor may offer a low price or a short timeframe. One common hook is when the scammer claims to be working in your neighborhood on another project and has leftover supplies.

§ Once started, a rogue contractor may “find” issues that significantly raise the price. If you object, they threaten to walk away and leave a half-finished project. Or they may accept your upfront deposit and then never return to do the job. Following a natural disaster, scammers persuade homeowners to sign over their insurance payment.

o Tips to Spot the Scam

§ Watch out for “red flags.” Say no to cash-only deals, high-pressure sales tactics, high upfront payments, handshake deals without a contract, and on-site inspections. Not all “storm chasers” are con artists, but enough are that you should be cautious any time a home contractor contacts you first…especially after a natural disaster.

§ Ask for references and check them out. Bad contractors will be reluctant to share this information and scammers won’t wait for you to do your homework. If you can, get references from past customers, both older references to check on the quality of the work and newer references to make sure current employees are up to the task. Check them out at bbb.org to see what other customers have experienced. And always be sure to get a written contract with the price, materials and timeline. The more detail, the better.

§ Know the law. Work with local businesses that have proper identification, licensing and insurance. Confirm that your vendor will get related permits and make sure you know who is responsible for what according to your local laws and that your vendor is ready to comply.