Question #5: Do You Require Any Money Up-Front?
There is a story we know of where a general contractor we know was with a customer, when a roofer knocked on the door. Shortly after, the police came and arrested the roofer. His scam was asking people for their initial insurance check and then not doing any work. This happens every year in Colorado Springs and it is why it is now illegal for a roofing contractor to require you to give him money up-front before any materials have been delivered to the job-site.
Oftentimes, even if the roofing company is not planning to disappear with your money, they may be asking you for your deposit money ahead of the material delivery in order to fund costs for other jobs because they have over-spent on other things (think – fancy trucks, expensive equipment, etc.) This could be a real problem for you if they run out of money when it comes time to buy your materials.
We recently met with a couple who told us that one of the huge roofing companies recently told them they wouldn’t even put their job on the schedule until they had deposit money, AND they wanted to draft it right out of the homeowner’s bank account!
So the simple rule is this: Don’t ever, ever hand over your endorsed insurance check or a personal check or let someone draft money out of your account until you have materials on your property. Remember – if you hand over your insurance money or personal funds, and the roofer walks away with your money, it’s gone. You will probably never get it back. Not only is it illegal for the roofing contractor to collect these funds, it’s common sense to protect yourself in this way.