Contractor fraud is rampant in Florida. Here’s how to protect yourself

On November 12, 2024By Pranco

JACKSONVILLE, Fla. – Contractor fraud is a widespread problem in Florida, from swimming pools to custom homes and roofing fraud.

It can be a disappointing and costly mistake for homeowners.

Christopher Cobb has decades of experience handling contractor fraud cases. In 2012, he was appointed to the State of Florida Construction Industry Licensing Board by then Governor Rick Scott.

“It’s a multi-billion dollar problem,” Cobb said.

News4JAX asked him what consumers can do to protect themselves. In many cases the answer is nothing.

“It happens all the time, and unfortunately it’s financially related,” Cobb said. “What you see is that contractors are in over their heads with the amount of work they have, and they will take money from one project and apply it to another project, causing shortages. And then they’re always, constantly trying to catch up. And at some point, if something goes wrong in that chain, homeowners get damaged and injured, and then the complaints come in.”

Some common tactics used by fraudulent contractors include: disappearing after payment, providing substandard work or materials, and involving homeowners in insurance fraud.

The best advice Cobb has is that homeowners should vet their contractors before signing any papers or sending payments.

“The homeowner has a responsibility to research the contractors as best they can. If I do all the audit activities and I do them perfectly, it still doesn’t necessarily mean that I’m going to avoid fraud because when you deal with a dishonest person, no matter how well you investigate him, the dishonesty is to deceive,” said he.

That’s exactly what happened to homeowners Nocatee earlier this year. A seemingly reputable homebuilder with a successful business record was accused of stealing $15 million from a group of 13 people.

Reality TV star Captain Sandy Yawn was one of the homeowners duped by the Pineapple Corporation. In 2021, President Spencer Calvert told the Jacksonville Daily Record that he was attracting more luxury home buyers than ever from abroad.

State’s Attorney RJ Larizza said that’s a big part of the problem.

“St. Johns is such a thriving environment. I mean, there are people moving here. Companies are joining us. I mean, they’re building a Bass Pro Shop. You got a new Costco, you got a Buc-ees. So people are flocking to St. Johns County. So it creates what I call a target-rich environment because the more construction you have, the more people move in, the more opportunities or opportunities there are for scammers to come in and take advantage of people, and essentially rip them off. to make.” Larizza said.

Larizza’s advice for homeowners is quite simple.

“Don’t give your money to people before you vet them. The best way to get your money back is to keep it and be very careful about who you entrust it to,” he said.

If you are being scammed, report the incident to the police and contact your local law firm. But don’t expect to get your money back.

“It’s difficult to get that money back. They take it, it’s gone, and then of course we can get jail time. We can serve prison sentences, we can do probation and get a large amount of restitution that they have to pay back. But the system says that if someone is unable to pay back the restitution, and in some cases it could be millions of dollars if he or she doesn’t have that option, you can’t lock him or her up for a period of time. violation of probation, which is very frustrating for everyone,” Larizza said.

Lawyers like Cobb can help in some cases, but the reality is that it often costs more money to file a lawsuit. In many cases, homeowners must limit their losses.

“You want to help them, but sometimes the system doesn’t let you. And I’ve often put myself in their shoes, thinking I couldn’t imagine being ripped off out of $100,000 by a contractor who said he was going to do something,” Cobb said.

Homeowners have certain rights under state law.

The Construction Recovery Fund for Florida Homeowners is a fund of last resort.

If you have exhausted all other options for reimbursement and entered a judgment against a contractor, you may be eligible to appeal to the state’s $24 million fund. But the maximum amount you can be reimbursed is $25,000.

“There is room for change in that,” Cobb said. “A more concerted effort is needed to prosecute these bad actors. Most of the time, people will do what you want them to do if they are threatened with jail time. If it’s just about money, they can chase me until I get tired of running, or I can just pay them back or they’ll just stop chasing me.

Larizza agrees.

“It is possible that there is a way to find a funding source to strengthen, perhaps the AGs fund, or perhaps to create another fund. Maybe, you know, there are ways that, within the licensing that can be done, I don’t, “I don’t know, but I’m a big believer in not losing your money,” Larizza said. “Be diligent, be smart and ask questions.”

As fraud claims become more common, Larizza has a message for the bad guys.

“The people out there dropping people off, be careful because we’re coming for you,” he said. “If we can prove it, we’re going to prosecute you, and that won’t be a pleasant experience.”

So here are the big takeaways:

Before signing a contract, homeowners should talk to people who have previously worked with the builder, go beyond who the builder suggests they talk to, look up any claims on the person’s license with the DBPR at myFloridalicense.comask your contractor to sign a “Release of Lien” to avoid problems with unpaid subcontractors and consider having any documents you sign reviewed by an attorney.