Home renovations can be an exciting time, filled with dreams of a fresh new look and improved living spaces.

However, for many homeowners, particularly those who may be considering sprucing up their nests for comfort or downsizing, there's a growing concern that needs our attention: scam tradespeople.

In recent times, a worrying trend has emerged, catching unsuspecting homeowners who are looking to make improvements to their properties.

The consumer watchdog has issued a stark warning about a scam involving tradesmen that are specifically targeting home renovators.

Beware of this clever scam when renovating your home! Credit: Shutterstock

The scam involves tradespeople asking for wire money transfers or large deposits upfront, only to leave the work incomplete or, in some cases, not started.

Consumer Protection in Western Australia has been vigilant, having received 25 complaints about such incidents in the past year.

These complaints aren't just about the failure to complete work; they also highlight issues with inflated deposits.

Consumer Protection advises that while it's normal for tradies to ask for a deposit, homeowners should be wary of those demanding large sums or full payment before any work is done.

‘When it comes to deposits, tradespeople are legally allowed to ask for them,’ the government body said in a statement.

‘However, a common issue reported to Consumer Protection is traders who demand large deposits—or even full payment upfront—then fail to complete the agreed work, leaving consumers both out of pocket and without the work done.’

To safeguard against these scams, it's recommended to use payment methods that offer some level of protection.

‘When it comes to payment, consider using a secure system like PayPal to access dispute resolution services if needed,’ the statement said.

‘If paying by credit card and you don’t receive your order, request a chargeback. And never send money by ‘wire transfer’ as this is a favourite trick of scammers.’

For larger, more expensive jobs, Consumer Protection recommends a modest 10 per cent deposit and suggests paying in instalments.

Another point to consider is when a tradesperson, already on-site for a different job, identifies additional issues that they claim need fixing.

‘If the work is unsolicited, a business will be breaking consumer law if they don’t observe a ten business day cooling off period before starting the job and collecting payment,’ Consumer Protection explained.

‘For example, if a tradie is at your house fixing a broken tap, then they notice your hot water system needs replacing, and they quote the job. You have 10 days to change your mind about this portion of the work without being financially penalised.’

‘If a trader was to cancel a contract after a deposit had been taken and no work had been performed or goods supplied, the trader is obliged to return the full deposit.’

In Western Australia, there are specific regulations in place to protect consumers. For residential work valued at $7,500 or more, a tradesperson is not permitted to bank a deposit exceeding 6.5 per cent of the total contract value.

If a contract is cancelled and no work has been performed or goods supplied, the tradesperson is obliged to return the full deposit.

Key Takeaways

• Consumer Protection in Western Australia has issued a scam tradesman warning to home renovators following 25 complaints in the past 12 months.
• The watchdog warns against tradespeople who demand large deposits or full payment upfront and then fail to complete the work.
• Payment methods such as PayPal and credit cards are recommended for their dispute resolution services and chargeback options, rather than wire transfers which are preferred by scammers.
• Consumer Protection advises a 10 per cent deposit for work, with instalments for more substantial jobs, and highlights the consumer law requirement of a ten business day cooling-off period for unsolicited work.

Have you or someone you know encountered a scam tradesperson? What measures did you take to resolve the situation? Share your experiences in the comments below!

 

[BellaB18]

My husband has just retired. He is a tradesmen. He always wrote by hand a quote for the client and would make it clear. A progress payment on the beginning of the job with on going payments and final payment on completion thank you. It was made clear. If it was a small job, a small payment then the rest on completion. All of his work was word of mouth. He advertised for one month in the local newspaper. Then from there it was word of mouth. The thing that l loved he worked for a lot of older people. Which l loved because l knew he was looking after them not ripping them off. Bless them a lot would say l will pay you now before he even started. He always made it clear no l will not accept any payments until l start. It shows how easy some of the older folks are taken and scammed.
Always get three quotes. And if to can ask family and friends if they have used a tradesperson,
Kind regards to all Vicki

 

[mylittletibbies]

Before we started flipping houses my husband and I had a renovation business.
For the five years we had this business, after one advertisement all our work came by word of mouth.
We never asked for a deposit or progress payments, just payment when the job was completed and every customer bar none, paid. We never had any bad debts.
It is my belief that if you are going to be in business then you should have enough financial backing behind you
If people are asking for large deposits, then they obviously are not financially stable.
If you are in WA then 6.5% is all that is legally allowable, and progress payments are just that.
Do not pay any more than the amount of work that is actually completed to that date.
I had a friend who paid an excessive deposit for a patio and then two progress payments.
When I dropped into her home the timber hadn't even been delivered. I have no idea what progress she thought she was paying for.
This company declared bankruptcy and she never saw her money again, or get her patio.

 

[maggiej]

Earlier this year I saw an advert on Facebook for having your insulation replaced in the roof. Ours when built 30 years ago had wool insulation and now I believe it needs replacing so I contacted the advertiser and got a quote which I thought was reasonable. BUT they wanted a large deposit and the quote was for only a few days plus they advised that they could do other work such as rodent protection and deoderisation. They would remove the old wool and replace with what appears to be wool batts. I considerd this but then I do not like being presssured into doing things so decided against having it done by them. I have heard nothing since nor seen the advert again

 

[Luckyus]

I've always paid cash on receipt of invoice on completion of the job, that way any problems can be sorted. What they do is their business, I do get a quote first before any mention of cash in hand for work done.

 

[Barbara V]

Surely that's par for the course pay nothing until something is started and do it in stages that's how my house build went and recently installation of a new air con paid when it was finished

 

[BellaB18]

Surely that's par for the course pay nothing until something is started and do it in stages that's how my house build went and recently installation of a new air con paid when it was finished

That is the way we had to run out little business. Because my husband was a man business we had to ask for progress payments. When he first started out we would wait until the job was completed. Well we were hardly surviving and we had two young children at the time. Our accountant at the time gave us the advice for progress payments. In over 30 years we had no trouble except for one man, who was ruled by his wife. And told my husband that he had not done enough work for a progress payment. My husband was devastated. He explained everything he had done stock he had purchased for the job. No this man was going to be a stand over with my husband because he was stood over by the wife. My husband ended up saying. This is not the way l operate my business l have worked extremely hard so far and you can't see that so l shall count my losses and leave.
My husband took months to get over that he really took a bit from this experience. He prided himself on his work and honesty.
Kind regards Vicki

 

[Barbara V]

That is the way we had to run out little business. Because my husband was a man business we had to ask for progress payments. When he first started out we would wait until the job was completed. Well we were hardly surviving and we had two young children at the time. Our accountant at the time gave us the advice for progress payments. In over 30 years we had no trouble except for one man, who was ruled by his wife. And told my husband that he had not done enough work for a progress payment. My husband was devastated. He explained everything he had done stock he had purchased for the job. No this man was going to be a stand over with my husband because he was stood over by the wife. My husband ended up saying. This is not the way l operate my business l have worked extremely hard so far and you can't see that so l shall count my losses and leave.
My husband took months to get over that he really took a bit from this experience. He prided himself on his work and honesty.
Kind regards Vicki

Yes it must be hard my son's in same predicament if he doesn't get paid or at least some part payment he can't go and purchase more building supplies

 

[BellaB18]

Yes it must be hard my son's in same predicament if he doesn't get paid or at least some part payment he can't go and purchase more building supplies

Exactly.
Kind regards Vicki

 

[Luckyus]

Yes it must be hard my son's in same predicament if he doesn't get paid or at least some part payment he can't go and purchase more building supplies

To be honest, it's not an ideal practice.

 

[mylittletibbies]

Yes it must be hard my son's in same predicament if he doesn't get paid or at least some part payment he can't go and purchase more building supplies

Yes, it is difficult working for yourself, without a decent sized bank account behind you.
Most suppliers however do allow 30 day accounts, which if you purchase at the beginning of the month, get your bill at the end of the month and then have 30 days to pay, giving you 60 days to complete the job.
Before I met my husband and we started our Reno business, I started my own business manufacturing baby Manchester. It started out small, from home, just me and twelve years later I had a factory with 20 workers and an agent in every state.
It was a hard slog, mainly due to the 30 day accounts system.
I won't mention names, I might get sued, lol, but the major department stores are the worst culprits, taking up to 120 days to settle their accounts, always having to chase them for money. In the meantime you still have to pay overheads, wages, etc. I would have a years supply of fabric to pay for and at times have close to $100k owing to me.
Working for yourself is definitely not easy, but it is rewarding.

 

[BellaB18]

Yes, it is difficult working for yourself, without a decent sized bank account behind you.
Most suppliers however do allow 30 day accounts, which if you purchase at the beginning of the month, get your bill at the end of the month and then have 30 days to pay, giving you 60 days to complete the job.
Before I met my husband and we started our Reno business, I started my own business manufacturing baby Manchester. It started out small, from home, just me and twelve years later I had a factory with 20 workers and an agent in every state.
It was a hard slog, mainly due to the 30 day accounts system.
I won't mention names, I might get sued, lol, but the major department stores are the worst culprits, taking up to 120 days to settle their accounts, always having to chase them for money. In the meantime you still have to pay overheads, wages, etc. I would have a years supply of fabric to pay for and at times have close to $100k owing to me.
Working for yourself is definitely not easy, but it is rewarding.

Well done
Kind regards Vicki