Home Improvement Scams Trends Report 2022
- 109,000 home improvement scams have been reported to the Federal Trade Commission since 2007, with an average of 6,124 scams per year.
- Americans lost $206.9 million to home improvement scams in the last 14 years, $13.8m annually.
- Residents of Nebraska ($5,730 per scam per year) and Minnesota ($4,500) lost the most to home improvement scams in the last six years
- Home improvement scams are most prevalent in Colorado, with six scams per 10,000 homeowners, annually.
- Roof-related projects are the most commonly mentioned projects in scam reports (15% of all Better Business Bureau reports since 2015)
- The number of scams reported peaked during the pandemic (44,000 between 2020-21).
- Over $82 million were lost in home improvement scams during the first two years of the COVID-19 pandemic (2020-21).
- In 2021, the median amount lost to home improvement scams was $1,700, 3.5 times the amount lost to all other scams ($500).
Pandemic Peak: How the Number of Home Improvement Scams Evolved Over Time
Between 2015-17, the number of home improvement and repair scams reported to the Federal Trading Commission (FTC) hardly exceeded 3,000 per year.
Since 2018, however, the number of reported scams has exploded.
In fact, from 2018-20, home improvement scam reports more than doubled each year, reaching 30,337 fraud reports in 2020 — by far the largest number on record.
This anomaly correlates with the declared year of the pandemic. Last year, the most recent FTC numbers show the total amount of fraud reports related to home improvement was 16,486 — only half the number registered the year before.
$82 Million in the Last Two Years: The Financial Toll of Home Improvement Scams
Despite reporting in great detail on the number of fraud reports filed by Americans, the FTC doesn’t offer data on the amount of money lost to specific types of scams.
Using figures from one of the sources of the FTC Consumer Sentinel Data – Better Business Bureau’s Scam Tracker – we estimate that Americans have lost a total of $206 million to home improvement scams since 2007, or roughly $13 million per year.
Remarkably, $82 million (40% of total) was lost to scams in the last two years alone; these were years notably dominated by the COVID pandemic.
>On the one hand, that figure pales in comparison to the $5.9 billion Americans lost to various kinds of scams and fraud in 2021. On the other hand, home repair scams affected a smaller part of the population, compared to, for example, credit card fraud and online shopping scams.
And while the median amount lost to any kind of scam in 2021 was $500, the amount lost to scams in home repair and improvement was more than three times higher, at $1,700.
Off the Charts in Colorado: Where Home Improvement Scams Are Most Prolific
Looking at pure counts of home repair scams, we’d find that America’s most populous states – Texas (12.4%) and California (11.8%) – were responsible for nearly a quarter of all such scams reported across the country.
But when we look at the number of scams relative to the number of homeowners, the primary consumers of home improvement services, a different pattern emerges.
Based on last year’s FTC figures, Colorado was the hotspot of home improvement scams, hosting six scams reported per 10,000 homeowners. For comparison, in the states that follow – Michigan (3.3), Arizona (3.3), Utah (3.2), and Texas (3.0) – the rate is roughly twice as low.
By contrast, the lowest amount of home improvement scams happened at a rate below 1 per 10,000 homeowners in states like Pennsylvania (0.7), Nevada (0.8), Connecticut (0.8) and Kentucky (0.9).
$430 in Nevada, $5k+ in Nebraska: The Cost of Home Improvement Scams by State
In the last six years (2015-21) for which we have the data, the median amount lost to home improvement and repair scams was $1,500.
It’s worth noting that only roughly one in two scams (54%) were associated with loss of money, the other 46% being scams that were spotted and reported before any funds exchanged hands. These are the cases when people reported a suspicious advertisement, a fake-looking home improvement contractor company, or a company that seem to be engaging in scammy tactics like trying to charge an unreasonably large deposit before commencing the work.
Bearing this mind, in which states did home improvement scams end up costing Americans the most?
Turns out, it’s Nebraska. The median amount lost to home improvement scams in Nebraska was $5,730, which is almost four times the current national average.
Another Midwestern state, Minnesota, had the second-highest amount typically claimed by such scams: $4,500. That’s three times the current national rate of $1,500!
On the flip side, the absolute lowest amount claimed by home improvement scams was in Nevada ($430), with Wisconsin ($530) not too far behind. In fact, there are 10 states where the loss to such scams was less than $1,000. The curious case among them is Michigan, where despite high rates of scams per homeowner, the typical amount lost to an average scam was only $900.
Careful on the Roof: Home Improvement Projects Most Affected by Scams
Using Better Business Bureau’s Scam Tracker, we were able to parse out individual scam reports filed under “Home Improvement” as of 2015 to see what types of projects and contractors were mentioned the most.
Surprisingly, many scams have something to do with roofing, including repairing a roof, installing a new roof, or shade roofing contractors. Since 2015, as many as 15% of all home improvement scam reports received by the Better Business Bureau were roof-related projects.
In addition, painting and painters were mentioned in 5.6% of all scam reports, while both paving and concrete projects were referenced by roughly 4% of reports.
Check out the interactive table below for all the stats on home improvement scams, organized state-by-state
Sources & Methodology
To isolate home improvement scams from scams associated with purchases of home appliances or insurances, the number of home improvement scams was taken as the number of reports filed to the FTC under the sub-category “Home Repair” of the “Home Repair, Improvement and Products” category.
All data on scam counts were taken from the Consumer Sentinel Network Data Book. The dollar amounts lost to home improvement scams were estimated using the “Dollars Lost” figures from the scams listed in the Better Business Bureau’s Scam Tracker under the “Home Improvement” category.
The number of homeowners in each state was taken from the U.S. Census Bureau.