How to Spot Dodgy Trades

Warning Signs of Illegitimate Businesses

The majority of those involved in the home building industry are good, honest and decent people. They operate reputable businesses and do the right thing for their customers. They ensure that the building work they undertake is compliant, meets the customer’s needs and they do the work they are paid to do.

Unfortunately, some people working, or pretending to work in the industry take advantage of customers who either don’t know better or allow their eagerness to save time or money to get the better of them. These people often take money and run. Or worse still, they take money, make a mess of the work and then run.

Sometimes I am asked to provide guidance on whether a small home building or trade business is legitimate or not. While this is not always an easy question to answer there are many warning signs that suggest that a business may be better avoided.

Here are some of these warning signs that you can use to identify possibly dodgy businesses:

1. They find you – you don’t find them. For example, they knock on your door to tell you that they have noticed that your home needs work done. Or claim they can offer you a discounted price as they are working in your area.
2. They will quote a very good, low price, provided you sign up immediately. They also request that you pay cash in advance to secure supplies or ensure “work” can start quickly.
3. Any person you speak to often only has a first name and they are generally not big on formality – or putting any detail in writing.
4. They have an advertised business address that is a serviced office or occupied by someone else. Such addresses will usually be in or near the CBD despite their advertising material usually being distributed in the suburbs. They often claim to be able to work anywhere.
5. Their advertised office phone number is an answering service or similar where you cannot be put through to the trade and can only leave a message.
6. They don’t give out an Australian Business Number (ABN) and other details such as a registered business name, company name, an Australian Company Number (ACN) or a builder licence number to identify themselves.
7. They claim to have many years’ experience but if you check details, if available, such as an ABN, business name or company name, you find they have only recently been established.
8. They have a website and other promotional material that looks professional and detailed but does not really identify who is operating the business. The website and other material have no photographs of the people involved in the business.

Finally, it is also worth remembering some basic rules before engaging any business:

1. Make sure you know what you want before you start searching for suppliers and quotes.
2. Try to get at least a couple of quotes – and make sure they are complete and comparable quotes.
3. Make sure you get key details in writing.

If you have any doubts, don’t be shy about getting advice. Usually, doubts are well founded.