by Susan Edwards, Ph.D. Imagine pulling up to a gas station, pumping $20 worth of gas, and after the tank is filled, telling the attendant you'll pay only $10 because that's all you thought it was worth. "Tell it to the judge," the attendant would say as he took your license number and called the police. If this was a construction job, however, the contractor would probably take the $10. Often, the contractor will even believe that there must have been something wrong with the work, otherwise the client would pay the whole amount. I've spent years studying fraud against builders, and have found that in many cases where contractors are cheated out of all or part of their final payment, their clients are pathological - people who planned from the beginning to get something for nothing. I call them "serial litigators," because they use lawsuits almost compulsively to get their way. They may complain about the quality of the work, but that's just a smokescreen. The issue is and always was money. How much money? Fraudulent people cost the construction industry millions of dollars every year; in fact, I believe the statistics are underestimated because consumer fraud often masquerades as customer dissatisfaction. During a recent training session, I asked a group of Midwest builders and remodelers to complete a survey on the financial loss associated with customers who defrauded them. After reviewing their own personal histories, this group of about 125 honest builders came up with a total loss of some $5 million - an average of $40,000 each. Given their current margins, they estimated they would need an additional $50 million in sales - $400,000 each on average - to absorb the losses. Unfortunately, there is no foolproof way to avoid being taken advantage of. To protect yourself, you need to reduce the chances that you can be fooled. You can learn to rescue yourself when you find that you're swimming with sharks, but it's easier to just stay out of the water. The problem is that fraudulent clients hide their true nature. The ominous appearance of a dorsal fin alerts everyone to a shark, but fraudulent people are more like piranhas dressed in goldfish suits. In this article, I'll give you some pointers to help you see these people coming.

First, however, I have to convince many of you that these people are real. If you're a builder, you've probably had clients like this, although you may not have guessed that they had set out deliberately to defraud you. Most builders are honest and they expect others to be honest in return. If a client complains about the quality of the work or...

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