It’s the scenario that anyone making home improvements dreads: assuming that you’re working with a reputable plumber or builder and then finding out that they are actually a rogue trader. Normally, this only becomes evident when it’s almost too late to do something about it. So, how do you protect yourself from being misled by someone without the of best intentions?
Be aware of the common scenarios
Rogue traders are everywhere in the home improvements industry. Construction work and refurbishment, for example, are big investments for most people but also something many of us don’t have a lot of experience in. There are large sums of money involved and often a lack of knowledge of what is a “usual” process means that rogue traders can get away with misleading people. A common scenario involves a deposit payment up front for something like a conservatory or an extension. The deposit is usually several thousand pounds but could be up to five figures. Often, that’s the last that the homeowner will see of their money as the trader simply disappears.
Doesn’t the law protect homeowners?
In theory yes. However, it can be quite a process. Currently, the law allows a rogue trader who has ripped someone off to simply declare their company insolvent and then start up a new company the next day and carry on. Anyone who has contracted with the old company will have only limited opportunity to get their money back, as directors can often walk away from an insolvent business without any liability for debts. Eventually, if there are enough complaints about a business, then Companies House may strike that person off as a director, which means they can’t create any more businesses.
How significant is the problem?
It’s a fairly substantial issue, especially as it often involves life changing sums of money. Citizens Advice receives 3,000 calls a month about building work that is substandard. Over the course of a year it received 7,000 complaints about work where money had changed hands but projects had not been finished. With 43,877 complaints annually, substandard builders represents the second biggest issue that Citizens Advice receives complaints about.
How can you avoid a rogue trader?
Use a credit card to make payments. If you opt for a credit card, as opposed to a bank transfer, then the payment is protected under the Consumer Credit Act. Bank transfers are not protected by this legislation.
Take out insurance to safeguard any deposit monies that you pay. There are plenty of schemes that offer a Home Improvements Guarantee to provide protection in the event that a rogue trader makes off with your money. Look for a scheme regulated by the Financial Conduct Authority (FCA) and offering a guarantee of at least 10 years.
Find a builder with an accreditation. The Federation of Master Builders, for example, has a strict set of membership criteria for those who receive its accreditation. It also has a Code of Practice and requires members to pass an independent inspection. If something does go wrong with an accredited builder then you have access to a government approved disputes service to try and find a solution to the problem. Other trading bodies include the National Federation of Builders and the Guild of Builders and Contractors.
Do your research. When people have a bad experience with a builder or tradesman today they are often quick to go online and tell others about it. So, by searching the name of the business, its directors and the individuals involved you might be able to find information that indicates you could have a problem before any money changes hands.
Use a reviews website. There are a number of different websites springing up today that rate services, such as builders and tradespeople. Rated People, for example, is endorsed by Location, Location Location’s Phil Spencer and enables those who have used a local builder or tradesman to leave a rating to give others some idea of what is was like to work with them.
Ask around. Often, the best recommendation for contractors will come from family or friends who have already used an individual or a company. If you’re planning an extension or a conservatory, for example, and you know someone else who has already had this done then get in touch and ask some questions about who they used, and why. You’ll get an honest review of the work completed and the way the job was handled, as well as how much everything cost.
Amanda Gillam is Solution Loans's General Manager and has been since 2009. She is also a prolific writer on personal finance issues, and has been quoted numerous times in articles published on 3rd party websites and in press releases. Her...Read more about Amanda Gillam