Home Renovation scams ... what you MUST know to protect yourself

Home Renovation scams

Updated: 15th Aug 2018
15 minutes read

Home Renovation Scams Alert

>100  RENOVATION COMPLAINTS  were lodged with CASE each month, for the last seven years.

If you are in the process of choosing a renovation contractor or interior design firm, invest the next 20 minutes reading this article. AVOID the months of misery, agony, stress and anxieties as another victim of renovation cheats and frauds. 

The average homeowner will spend years to save up for renovation. And some will spend years to pay up their renovation loans. Why lose your hard earned savings to scammers or irresponsible contractors?

The POLICE  can't help because it's a civil case, not criminal.

Every year for the last seven years, more than 1200 victims fall prey to renovation scams in Singapore. And before you silently assure yourself that …. ”Hey, It won’t happen to me”…..think again.

A great percentage of victims did some form of due diligence, they were cautious, and yet, they ended up losing their life savings to professional scammers. 

The AUTHORITIES .... CaseTrust, HDB, SMALL CLAIMS can't help when the companies shut down.

YOU owe it to yourself to know what you're getting into! 

long-arrow-down

A Bulletproof Approach

What is the most bullet-proof and comprehensive approach? Enough information has already been written about renovation scams, cheats and frauds. But you just don't find a one-stop shop whereby information is constantly updated and includes what we believe to be a full-proof approach to tackling these issues.

This article is written with the homeowner in mind, to provide you with all the information needed before you make a decision about which interior design firm to go with. It's written with ONE GOAL, for you to dramatically reduce your risks of being a victim of home renovation scams. And we’re taking it seriously, on a quest to make a difference to the renovation industry.... one reader at a time. 

SPREAD THE WORD ....  share this page, so that together, we can stomp down on the bad apples.

Anyone who is about to engage an interior design firm for renovation should benefit from the information provided here.  

Renovation Scams - The Highlights

rocket
Renovation Quiz

Take your knowledge to a test to see how much you know and protect yourself from potential renovation cheats and frauds

diamond
Renovation complains

An overview and insights of the renovation industry and the number of complains filed according to CASE.

road
True cases of renovation scams

Take a dive as we drill into the real-life stories of recent years where victims share their experiences or when a case is published. 

trophy
Guide to protecting yourself

Follow us through a detailed two parts twenty points checklist, so that you will avoid becoming the next victim of renovation frauds.

1

How vulnerable are you to home renovation scams? Take a quiz to find out. 


renovation scam quiz

Click on the image to find out

2

Overview of the renovation industry and the number of complains over the years. 


Once again, the renovation industry continues its reign in the top ten lists of consumers complaints. Ever wonder why the renovation contractor industry hold the title of having one of the highest numbers of complaints filed to CASE in the past decade?

A loosely regulated industry

It’s not that surprising because it’s still a loosely regulated industry. Consider that fact that anyone can just simply register a company, find a shop space and start operating a renovation business. And at the same time start claiming that they are Interior Designers and collecting payments. 

What’s worst is that these bad apples of the industry can just fold up their companies when the scams and complains are too widely publicized. And just open a new company with a new name to continue with their deceptive ways. To date, there is no regulations or laws in place to stop them from doing so. 

Data from Case ( Consumer Association of Singapore )

Comparison of the number of renovation complaints received over the past decade

Year

No. of complaints

2008

1254

2009

946

2010

1313

2011

1488

2012

1532

2013

1779

2014

1462

2015

1447

2016

1269

2017 (Jan-Jul)

719

Insights on CASE statistics on renovation complains

According to Consumer Association of Singapore (CASE), there were 1269 complains against errand or rouge contractors in 2016. And 719 complaints for the first seven months of 2017. This works out to an average of slightly over 100 complaints per month in 2017. Should the trend continue, we’re likely to see no less than 1200 complaints in 2017, not too different from 2016.

Though 1269 complaints represent a 12% drop in complains year or year compared to 2015, it may not reflect the actual figures of unhappy homeowners. And unless the governing bodies intend to take drastic measures to arrest these issues, we’re not likely to see any significant improvements to customers complains over renovation companies in the foreseeable future.

Which means that you as the homeowner and end consumer, is at the disadvantaged end of the transaction. And you want to equip and protect yourself from becoming a victim of these scams. 

Mr Linus Ng, chairman of the education committee CASE

"We suspect the number of complaints we have is only a fraction. It's the tip of the iceberg. There are many smaller players out there, and a lot of these smaller players are probably doing a lot of dubious practices which could harm consumers.”

3

Renovation scams - Real stories

​ 


Home Renovation scam victims

True stories of renovation scams below, which is constantly updated when new cases emerge, can help you to understand what went wrong. From these stories, valuable lessons can be learned so that you wouldn't fall prey to the same traps as the thousands of homeowners had over the years. 

4th Aug 2018 - 89 victims involving nearly $1.8 million

27 Nov 2017 – ID salesperson scammed over 10 victims over $100,000

27 Aug 2017 – Homeowner got scammed and share his experience

27 Sep 2017 - Licensed HDB contractor go MIA 

27 May 2017 – Homeowner thought engaging an ID firm through a renovation platform would be safe.

10 Jul 2016 – Couple paid 90% ($63,000) but the firm couldn’t deliver

19 Oct 2015 – 14 complains about company lodged with Case amounting to over $450,000

19 Oct 2015 – 15 BTO homeowners lose more than $170,000 to a contractor

Case stories shall be constantly updated with the most current ones. If you find a case that you feel should be mentioned here to benefit others, please contact us. 

4

The Ultimate guide to protecting yourself against home renovation scams 


ultimate guide to renovation scams

If you want to protect yourself as much as possible against these errand contractors and ID firms, make sure you bookmark this page, and come back to this list and tick them off when selecting an ID firm for your renovation works.

The 20 points checklist is divided into two parts. Part one consist of a checklist you want to tick off when selecting a renovation firm. And part two consists of another checklist you want to stick to when you have selected your chosen contractor. Making sure that you do not deviate from this  crucial pointers.

Checklist - Before you decide on an ID firm 

If you managed to put a tick to all the ten factors mentioned below, then you're one step closer to avoiding being scammed. 

Essential Checks

Whether its private residential or HDB flats, we strongly suggest going with an ID firm that is jointly accredited by CaseTrust (Consumer association or Singapore) and RCMA (Renovation contractors and materials supplies association). 

ID firms jointly accredited by CaseTrust/RCMA offers the first and most important line of defence to you against being scammed.  These firms are required to protect a customer’s deposit by purchasing a performance deposit bond. Which safeguard innocent homeowners against liquidation or closure of the company.

Of the 1534 companies currently registered as operating a renovation business in Singapore, only less than 0.03% are jointly accredited. Which means that currently, less than 50 renovation companies is accredited. 

In order to qualify for the accreditation, these companies are also required to provide a clear fee policy, well-defined business system and well-trained personnel. For a list of ID firms jointly accredited by CaseTrust/RCMA, go here.

Home Reno Pte Ltd is one of the 0.03% of companies accredited, So feel free to browse through all our packages and shop with peace of mind. 

Check that the company is at least registered with ACRA (Accounting and Corporate Regulatory Authority). If it's not found in the directory, then they are not a legitimate company. You can go to this link and search under a business entity.

Be sure to enter the company name as it is. For example, Home Reno Pte. Ltd. Leaving out the full stop will return no results. 

Registered company with ACRA

If you’re renovating an HDB flat, ensure that the ID firm is also a licensed contractor with HDB. For a list of HDB licensed contractors, you can refer to this link

Companies accredited by CaseTrust shows a logo like this


Casetrust
hdb licensed contractor

If you click on the link on the respective company, you can also find out more details about the company. For example, useful information like whether the company had been under suspension or demerit points sustained over the past 24 months. 

Check if they are at least listed a registered member as a renovation company in RCMA. A non-profit organization dedicated to promoting the industry and improving the quality and standards of the construction scene in Singapore.


member of rcma

More safety checks

Even if for whatever reasons, you still choose to go with an ID company not jointly accredited with CaseTrust/RCMA, they should at least be accredited by CaseTrust as a bare minimum. Using the above link for CaseTrust directory, see if the company is CaseTrust accredited.

Screen thru CaseTrust consumer alert page for companies that have been flagged with complains. Here is a link to consumer alerts you should visit before deciding on a renovation firm. 

Constantly check the Singapore Police Force Facebook page to get any relevant updates on complains when it happens.  See to it that the company you have selected do not have any outstanding cases under investigation.

Here is a sample post where homeowners chipped in to share scam alerts on the Singapore Police Force page.  

Legwork and TO-DO List

Before signing on the agreement, make sure you visit the firm's physical office and ensure they are operating as a business should be.  Anytime you discover their office happens to be a makeshift shop or just a mailbox address, keep your money and run in the opposite direction.  

Make sure you compare at least 3 to 5 quotes from different companies. Regardless of whether it's a referral contractor or your bosses friend, you should have a few quotes for comparison. For a rough guide, you can also try an instant calculator here

The process of meeting different interior designers and getting their quotes also provide you with a choice of sizing up who is more reliable, who do you feel you're more comfortable with. At the same time, you might get different ideas and opinions from different IDs as compared to just sticking to one.  

And finally, before you sign on the dotted line and part with your money,  make sure that the company you’re selecting does not offer a quote that is significantly lower than 30-40% from other companies with the exact same items and materials. If they do, you should be ALARMED rather than fantasizing that you've found a great deal. 

If you have read through the real stories and cases, you should probably know that greed has been the downfall of many.  Going for the cheapest quote, just because it was significantly lower than the rest, opens up your vulnerability to being scammed. 

Checklist - After you decide on an ID firm 

So the chosen one has passed the test, what next? This is where it gets tricky. Some homeowners were convinced that after they complete the arduous task of selecting an ID company, they have done their homework. 

Truth is, that is only half of the story. Ensuring that your renovation works will complete on time requires constant monitoring and communication. Be sure to go through the next ten points religiously so that you can be rewarded with a happy and expected outcome. 

Essential TO-DO List

Never pay more than 10% for the initial deposit before work commences. If you have chosen a CaseTrust/RCMA accredited company, then they are required to collect no more than 10% as initial down-payment.  However, if you're going for non-accredited companies, they may require up to 30% initial deposit citing company policy. It's your choice. 

Make sure that your requirements are specified and properly documented. A timeline for the completion of works should be indicated.

A progressive payment schedule should also be specified as to when and what amount the next payment should happen. Any other mutual agreements between both parties should not be just verbal but in writing as well.  

Each time you make a payment, it should be payable to the company engaged. Never make personal payments to a designated salesperson in his/her own name. 

Always collect an official receipt for all your payments made. This should preferably be done immediately each time in exchange for payment made. 

Where possible, payments should be made via a crossed cheque or cashier order. Bank transfers or cash are a less desirable form of payment when it comes to protecting yourself. 

Never agree to make full payment before all the works are complete. You should never be too sympathizing and agreeing to do so when your contractor seeks help because of cash-flow problems.  

In many cases, owners were too gullible to part with their money when a contractor use the excuse that "work cannot continue because of a cash flow problem". They may further explained that they have many ongoing jobs but have yet to received payments. And that you can help by making payment first so that they can purchase the materials or pay the workmen needed to continue on your work. 

Additional TO-DO List

Not only should you ask for regular updates, you should also visit on site regularly. By regularly, once a week would suffice.  Rotate these visits sometimes with notifying the ID of your visits (expected) and popping by sometimes when you know no work is being done. This would give you a much better idea instead of just visit whenever they are present. 

Each time a progressive payment is due, always ask for an update what has been completed. And always make a trip on-site to determine if you're happy with everything before making payment. Bring a notepad or use your phone to note down items and issues you observed to be raised before making the next payment. 

If something is done incorrectly, be sure to bring it up before progressive payments and get an assurance and timeline when it will be rectified. Don't leave this pending until the end where 90% of the payment had been made. Fact is, contractors continue to have ongoing projects besides yours. 

When 90% of the payments were made, they may be too preoccupied with other ongoing new projects to resolve minor outstanding issues of yours. It not that they wouldn't attend to it. It's just going to take them longer to see to it. 

Communication is very important to ensure that the renovation gets done the way you expected it. Always make it a point to ensure that your ID understands what you're after so that unnecessary hiccups can be prevented. 

The more meticulous you are, the more detailed you can be, the better. Don't leave it to the assumption that your guy can read your mind and knows what exactly you want. Misunderstandings and delays often happen as a result of a lack of clear communication. 

If you have covered these twenty points and put a tick to every one of the points.... BE PROUD. You can say you have done your homework. And you're one step closer to having your dream home instead of a nightmare engaging a renovation cheat. Feel free to comment below what else can be added to the checklist. So that every homeowner can benefit from it. 

Please rate how your find this article

4.8/5 (10 Reviews)