Last week, two Florida homeowners expressed concern over the fallout from a roofing company’s fraudulent activity, adding fuel to an already burning industry’s fire. But several Florida contractors have also recently fallen victim to sketchy enterprises, generating concerns about the security of the roofing industry.
It’s been easy for industry watchdogs to point the finger at unethical contractors for conducting shady operations, but a less prominent issue in the news has been the fact that contractors are also vulnerable to being scammed by subcontractors and employees.
Floridians face mechanics liens, foreclosure threats after roofing jobs go awry
Todd Ulrich, a reporter for WFTV, examined the ongoing roofing scam issues in Florida, honing in on two particular customers of contractor Ben Kee Construction. The customers, Pam Bender and Harry Watters, though strangers to each other, allegedly shared similar experiences with the contractor, both claiming that they were victims of fraud.
In Bender’s case, she was faced with a mechanics lien placed on her home of $16,000. Ordinarily a mechanics lien is a tool used by contractors to recover payment. A lien attaches to the property, providing the unpaid contractor with a security interest in that property. But in this case, Bender was quite satisfied with the quality of her roof and claims she had paid for it in its entirety.
Ulrich reports that Watters, also a customer of Ben Kee, was the alleged victim of a sizable scam and is now taking legal action.
“We were in total shock! We played by the rules,” Watters exclaimed. “How could this be allowed to happen?
Unfortunately, scams similar to these have been embedded in the roofing industry for quite some time now.
Levelset’s Iain Smith breaks down the severe consequences of this type of fraudulent enterprise, noting that several insurance companies have been battered thanks to dishonest contractors’ roof inspections and insurance claims. Smith states that “when the insurance company’s payout is far less than what the contractor requested, the contractor will then sue the insurance company without the homeowner’s permission.”
Fraud is pervasive these days, and mega-storms like Hurricane Ian have certainly had an effect. Some companies have been recently found guilty of conducting door-to-door scam operations on vulnerable homeowners dealing with damaged property.
Contractors are hurting as crooked employees shake down businesses
In some cases, not everyone within the contracting company is on board with conducting deceptive operations.
A Florida roofing contractor, Roof It Better, reported losing “somewhere between $200,000 and $300,000” to a deceitful employee, according to WPTV. Despite some financial struggles, the company was doing well and had a positive reputation with its customers — until the employee allegedly pulled off extensive theft.
“Emotionally, I don’t know how I’m keeping it together. We were already sort of financially struggling, brought him in to help us out and he took advantage of that. I just trusted the wrong person,” said Roof It Better’s owner Tim Mehaffey.
“He’s got all my files. He has my server. I had to have the police to and get my trucks. They were spread out between three counties.”
In other news, an employee of a Pennsylvania roofing contractor came forward earlier this summer about committing fraud with the company’s assets. She allegedly made unauthorized purchases and wrote unauthorized checks totaling $394,412.44.
An uptick in employee fraud could in part be due to the nationwide labor shortage, a crisis currently being battled by contractors fighting to keep and hire skilled and honest workers. There’s no doubt that trust in the construction industry is key, and without effective training measures, the risk of unethical or even criminal employee behavior could be high.
Transparency is a vital aspect of a strong contractor-client relationship
With evidence of various types of scams in the roofing industry, it’s important for contractors and homeowners alike to be aware of the risks when hiring certain subcontractors and employees.
Understanding all aspects of mechanics liens and lien waivers should be a common practice, and general contractors, subcontractors, and homeowners can benefit from contractor prequalification, a method used for ensuring the reliability of all parties before even beginning a project. Scams may be preventable through quality research and transparency between contractors and clients.