Thinking in extremes. To a pathological
personality, everyone is either a hero or a zero. Everything
and everyone is evaluated in black or white, with no gray areas
This is a problem because all people are a mixed bag of both
good and bad traits. By thinking in extremes, the pathological
person is wrong much of the time. You may start out as a hero,
but the first time you disagree, you'll become a zero.
Pathological personalities often
attribute all success to their efforts alone. If your client
brags about his or her success, pay attention to how the person
attributes failure. If failure is always someone else's fault,
this type of person will be difficult to work with. Unable to
take responsibility for their own actions, they compensate by
laying blame on others. If this type of client delays the job
because he or she can't decide on the color of the tile, you
can be sure that the missed completion date will be your
Control through flattery.
is directed at your ego, not your work. If your work is
excellent, you don't need flattery - the work speaks for
itself. Flattery is an attempt to soften you up so you'll give
in to the often outrageous demands made later.
Often, a pathological person will tell you you're the best,
even though they have never seen your work. Again, this points
up the importance of asking how the person was referred to you.
If by a previous customer, backtrack in your records and memory
about whether that past customer was pleased with you or not.
After all, this referral could be someone's idea of revenge.
Also find out as much as you can about why the prospective
client thinks you're the best person for the job. If you push
hard enough, their insincerity may eventually show through.
Seduction is about power, not sex,
so it can occur with a person of the same or opposite sex. If
your prospective client treats you seductively when you're
trying to discuss business, it has nothing to do with the
sexual desirability of you or your crew. Rather, it reflects
the person's view of how to handle people. Pathological people
use power to control and abuse others; healthy people share
Compassion is a sad
feeling someone gets when bad things happen to good people.
Pathological clients typically lack compassion altogether. One
of the most amazing illustrations of this point I've ever heard
was shared with me by a builder who realized too late that his
client was without compassion. He had sent a carpenter over to
a home as a special courtesy to help a difficult client. He
soon received a phone call, with the client screaming on the
other end: "This guy fell over with a heart attack. He's dead.
Get him out of here - I'm having a dinner party in two
Very few clients will send such a clear signal, but there
are ways to uncover a lack of compassion. I know a builder who
tells a true story about the death of a local child just to see
how the client reacts. Another builder weaves in stories
involving the vulnerabilities of the builder's own loved ones.
Not all people show their feelings on the outside; some are
very private. However, not showing feelings is different from
not having them in the first place.
Educating the Client
you haven't unmasked fraudulent clients before the job starts,
you're sure to find them out once the job is underway.
Typically, fraudulent clients will show their true colors once
the contract is signed and work has begun. The first sign may
be a sudden change in attitude - from being cooperative and
lavishing you with compliments to working against you and
attacking you with accusations. Take this change of mood
seriously and consult with your attorney immediately. Chances
are you're in for some rough sledding.
Of course, it's always best to avoid doing business with
fraudulent people in the first place. If you weren't able to
detect any of the characteristics of fraudulent intent
mentioned earlier, there is one last line of defense: the
paperwork treatment. This involves two steps, the first of
which is to make sure your contract is in order and that you
have paper systems in place to document every aspect of the
job. The second step is to review all of these materials and
procedures with the client before you sign the contract. If
your client is honest, you will have set the stage for a
successful project by setting the proper expectations. If,
however, your client is intent upon fraud, your elaborate
documentation system may scare them off and spare you the cost
of trying to extricate yourself later.
Here are the elements builders and their attorneys have
reported as being most helpful in reducing the success of
clients intent on defrauding them.
Make sure your contract
contains a termination clause. If the relationship breaks down
and you and your clients are not able to work together, your
contract should specify exactly how you can each go your
separate ways. Like the ability to annul a marriage, this
clause frees both parties to move on.
Bidding and billing.
Make sure your payment
schedule covers all of your costs plus your overhead and profit
and, if your state allows it, stay ahead of your clients. Above
all, don't show your overhead and profit as a separate item and
leave it to be paid as the final payment. Fraudulent clients
have a way of discounting the value of a job by withholding
payments for overhead and profit. They may argue, for example,
that your margin is like a gratuity at a restaurant. If you
fail to pay for the food you order in a restaurant, the police
would be called. But if you don't leave a tip, nothing
But your margin is not a gratuity - it's part of your cost
of doing business. You can tell your customers your margin if
they ask - most will know it anyway - but structure your
bidding and billing so that your margin can't be construed as
an "extra" cost. By folding your margin into each item involved
in the work, you will avoid losing money to a fraudulent
It will come as no surprise to
contractors that my research shows that more than half of all
successful fraud against builders involves "change order
confusion." In other words, pathological people pretend they
don't understand that change orders involve money. They use
this ruse so frequently because it is a weak, "he said, she
said" area of the law that involves a difference of opinion or
interpretation. Opinions are subjective and therefore more open
Work with your attorney to develop a system for handling
change orders that includes four essential pieces of
documentation: a written explanation of the change, a drawing
of the change, the dollar amount associated with the change,
and the effect of the change on the schedule. Have the customer
sign and initial each of the four, and send followup memos
summarizing all four elements. (Some builders even use videos
or tape recordings.) Remember, it is your responsibility as the
contractor to show that the change and its cost was agreed to
by everyone, and that the change will alter the appearance of
the original project and delay its completion. When the
documentation shows that everyone had the same awareness, it is
harder for pathological people to convince others they were
"confused" and didn't understand that a marble countertop would
cost more than plastic laminate.
This is another area where
fraudulent clients have a field day. To counter their strategy,
design a standard form for allowances that explains, in simple
terms and illustrated by drawings, what allowances are and how
they work. Include a before and after case example, such as a
"before" description and illustration showing a 4-inch plain
glazed tile backsplash and an "after" version showing a 6-inch
hand-painted tile backsplash with contrasting border tile.
Leave room at the bottom of the form to list all of the
allowances for the job at hand. Review the form with clients
before the job begins, and have them initial that you've
discussed this prior to starting the job.
Then when you are working on the kitchen and they choose a
cabinet set that costs $2,000 more than you allowed, write a
change order that describes and illustrates this change in a
style identical to the sample on the allowance form. Include a
line that spells out the extra cost and, again, have them
initial that you have reviewed the change with them and that
they understand the extra cost. This may seem tedious, but it
will establish a paper trail that makes it absolutely clear
that the clients owe you an extra $2,000. Since you presented
them with the information sheet at the beginning, they can't
claim to be surprised.
As with allowances, your
best defense against a client who claims to be confused by
extra costs for unexpected or hidden problems in the work is to
educate them before the job starts. Use an information sheet to
explain hidden conditions, using common examples such as wiring
hidden behind wall finishes or decayed lumber concealed under
flooring. Use illustrations if necessary, and be sure to attach
a dollar amount to each example. As always, have the clients
sign the information sheet to show that you have explained -
and they have understood - its contents.
You should also create an
information sheet to explain how a delay in one part of the
work both increases costs and delays completion. It's
especially important with fraudulent clients to include an
"owner delay" clause in your contract. Pathological people will
attempt to undermine your schedule at every turn, then use it
as an excuse to withhold payment.
Attach industry standards
to your contract. This will go a long way toward preventing a
fraudulent customer from using dissatisfaction - real or
pretended - to get something for nothing. If someone wants a
$5,000 discount from you, make them negotiate that up front,
not as a condition of your final payment.
Susan Edwards, Ph.D., is a nationally recognized speaker
and writer on consumer issues in custom building. A
psychologist in Princeton, N.J., she is author of
Clients: How to Protect Yourself (Miller Freeman Books;
800/444-4881; also available at www.amazon.com).