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How contractors can prevent fraud accusations

The world of construction frequently relies on word-of-mouth referrals. Your contracting company’s reputation can either catapult your business to new opportunities or financial ruin. Even if you haven’t committed fraud, news of an accusation can travel fast throughout the industry.

Therefore, contractors must plan ahead to protect their business from allegations of fraud. The Tennessee Department of Transportation (TDOT) lists several warning signs of construction fraud. Mitigating these risks through responsible business practices can shield you from complicated legal disputes and keep your work flowing.

Quote accurately

During renovations and construction, unforeseen issues can be very common. Although you probably can’t pinpoint the exact expense of a project, you can give a realistic quote to your client. Some contractors may commit fraud by under-quoting to get hired for a project, but later bill their client far beyond the estimate.

Report materials honestly

Both the amount and the nature of your materials should be clear to your client. Keep documentation of your suppliers and costs. Tell your client if you plan to use discounted refurbished supplies and don’t ask them to pay the same price as brand new materials.

Update licensure

TDOT also offers information about the different types of construction licenses. Contractors cannot legally bid on a project without a valid license to practice. The type of required license depends on the estimated value of the project and the kind of task you offer.

Of course, no contracting company is guaranteed to be safe from allegations of fraud. Simple mistakes might turn into full-blown investigations, which can be time-consuming and complex. When facing fraud claims, your attorney can help you navigate the investigation.

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Robertson Law Group
1896 General George Patton, Suite 600
Franklin, TN 37067

Phone: 615-656-1729
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