What Contractors Should Do if a Client Alleges Fraud
Learn the right steps contractors should take if faced with fraud allegations, from documentation and communication to seeking legal guidance.
The last thing any contractor wants to experience is a fraud allegation. But these situations do happen, even when you’ve been careful with project management and client interactions. You don’t want to find yourself in a situation where a homeowner is unhappy and suggests you made misleading claims. A fraud claim can derail your business and reputation if you’re not careful.
Fortunately, it is possible to keep your business secure when the worst happens. Keep reading to learn what contractors should do if a client alleges fraud.
Gather All Project Records
Documentation will be your best friend in the event of a fraud allegation. Make sure you have all job-site records and other pertinent documents that can demonstrate you operated a fair project and met all obligations.
Gather signed contracts that outline the scope of the job. Collect invoices, receipts, and other indications of payments. Did you take photos of the project? Create a file that contains these, as well, to show progress on the job visually. And any communication records from your interactions with the clients can be critical, as well. If a client claims you failed to fulfill a promise, an email that states otherwise could be helpful.
Loop in Your Insurance Agent
As a contractor, you probably carry general liability insurance or another form of coverage. It’s best to make sure your insurance agent is aware of the situation when you’re faced with a fraud allegation. And you may need to loop them in if you’re hoping to retain coverage. Your agent should be able to help you understand whether you can or should file a claim.
If fraud coverage is not part of your insurance package, your agent may be able to guide you toward a skilled defense attorney. And if you’re in Texas, you can secure experienced legal defense in Friendswood to help navigate the situation.
Highlight Documented Scopes of Work
When you’re trying to invalidate fraud charges, look at your written scopes of work. These documents, plus any applicable change orders, can demonstrate exactly what was included in your project. If your project involved upgrading a family room, for instance, make sure the scope of work outlines all steps and costs in the process. That way, you can show that you offered a fair price and were transparent about it from the beginning.
Avoid Saying Too Much
A fraud accusation can put anyone on the defensive. But you’ll want to be tight-lipped to avoid saying anything confusing or unintentionally damaging. Maintain a professional profile with your business and only use social media to post about your latest roof upgrade or bathroom remodel. Keep the fraud dispute off of social media and work with an attorney to ensure you’re saying the right things.
Staying composed under pressure is key, and maintaining balance in your personal life helps too. Just as keeping track of your wellness plan with a virtual registered dietitian ensures you stay in the right state of mind, managing stress through healthy habits can help you handle legal challenges with clarity and confidence.
Fight Back Against a Fraud Allegation
Fraud allegations can be scary when you’re trying to run a contracting business. Stay calm and focus on gathering as many documents connected to your project to help preserve your reputation. Look at the written scopes, communicate with your insurer, and work with a seasoned attorney. When you take these critical steps, you can help protect your brand and move forward.
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