A home improvement scam - beware your contractor

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Spring is here and many homeowners are looking to start home improvement projects, but before you hire a contractor and begin construction on your home you better do your homework.

"You have to see their work, because otherwise you're going to end up losing lots of money like I did," said hired contractor Elmer Cortez.

Cortez had a plan: buy a home, renovate it and flip it for profit. His plan backfired, and he blames the contractors he hired.

"I paid them every two weeks, $12,500. So when I pay them the last (the third check), and it was a total of $37,500, they started disappearing. They didn't come to work anymore, and if they came, they would start drinking at work,” Cortez said. "As you can see there is more beer here in the back."

Frustrated, Cortez videotaped the damage he said the men did to his home.

"This is a fire hazard area for the neighbors. They started burning the wood from the house so they don't have to pay to dump this away,” Cortez said.

"Probably the roof was most expensive thing to fix because we have to tear it down the job because they did was so bad," Cortez said.

Only after it was too late, Cortez found out his contractors were not licensed he had never checked them out.

They gave me a business card showing their names and showing a license number. And it looked legitimate to me,” Cortez said. “So I just trusted them.”

The Los Angeles City Attorney's office is now prosecuting the men, as well as 82 others, as part of a city wide crackdown on contractor fraud.

"We think it is a very common practice. It costs consumers, annually, $100 billion nationwide. Here in California, it's one of the top five, consistently one of the top five, consumer complaints," said Rocky Delgadillo, Los Angeles City attorney.

Nationwide, complaints against contractors are up more than 28 percent in the last four years. Last month in New York the Westchester County Department of Consumer Protection held a sting in a home to catch unlicensed contractors.

"Of the 17 people arrested in this case, six of them have a prior criminal history," said Thomas Belfiore, public safety commissioner.

Your best defense is to check contractors' qualifications and you can do it online.

"In many cases there's a database that's maintained and lists certainly if there's licensing that's in effect but also if there are any outstanding complaints or unresolved complaints against that contractor," said Vince Butler with the National Association of Home Builders.

A valuable lesson Cortez learned only after he said he lost more than $50,000 on his house.

“Trusting contractors, and I'm sorry to say this, it's not the best thing. You've got to do your homework. You have to investigate their license," Cortez said.