In our day and age, fraud has become more widespread than ever. While some scams are easy to notice, others are more devious and look like real opportunities to save money. Let’s take a look at one of the most popular fraud techniques known as contractor solicitation and learn how to avoid it.
What Is Contractor Solicitation?
Contractor solicitation is a type of fraud that targets homeowners. With this tactic, scammers aim to steal insurance rights and then file claims on the owners’ behalf. Since the owner won’t be notified regarding this change, it can be extremely difficult to find out if one has been scammed.
How Does It Work?
As previously mentioned, contractor solicitation targets homeowners. So, for instance, let’s assume that we are approached at our home by a contractor offering payment or gift cards to be allowed to inspect our roof. Afterward, they will let us know that the roof needs replacing due to severe damage. While we weren’t aware of any existing damage, the chances are that we will trust the contractor, as they claim to be professionals.
Next, the contractor will tell us that our existing insurance company can cover the cost without any extra expenses. To make the process easier, they will promise to communicate with the insurance agent on our behalf and handle all the work themselves.
The contractor will ask us to electronically sign a document that should authorize the work on our roof. In order to avoid suspicion, they will quickly scroll to the bottom of the document and have us sign it.
What Did I Sign?
Unfortunately, what we’ve just signed wasn’t a roof replacement contract, but an Assignment of Benefits. This legal document transfers our insurance rights to the contractor. As a result, they can now file insurance claims on our behalf, file lawsuits against the insurer, and even receive payments from our insurance payouts. But since we signed the form electronically, we don’t have a copy, which prevents us from acknowledging the scam.
Now, the contractor will most likely charge the insurance company a large amount of money for the roof. What’s worse is that even if they don’t complete the work, they can still receive money from the insurer due to contractual obligations. Some scammers will also prevent us from communicating with our insurer using fine print. Therefore, if we have any questions about the contract, we won’t be able to ask the insurance company.
The Bottom Line
Overall, it’s important to remember that anybody can fall prey to scams. That’s why we need to be vigilant and never sign a contract without reading it first. Additionally, when looking for roofing contractors, always go with a local company that has a good reputation. And if we become victims of insurance fraud, it’s imperative to get in touch with the insurance company as soon as possible. Contact Tadlock today to learn and get a free estimate.