It is a common assumption that only companies propagate construction frauds. However, the fact is it is a two-way process. It means contractors and parties also propagate embezzlement. In fact, these types of frauds are more prevalent in the UAE construction industry.
According to estimates, on average, companies lose 5 percent of their annual profits to frauds and this percentage is double in the construction industry. Unfortunately, most of the times construction companies lose more money due to different frauds, committed by partners, contractors and employees.
False claims, for instance, are a significant risk to construction companies. In such claims, the amount claimed is unfair and unjustified. Meaning, the claimant puts an inequitable amount in the request, and the company awards the amount if they don’t have a proper fraud verification system in place.
Now a question arises, how to verify frauds and keep away from them? Companies take the services of the professionals claim consultants for this purpose.
Therefore, if you also want to protect your company against construction schemes, hire the services of the best construction claims consultants Dubai based services to mitigate your risks. Professional consultants make sure to protect companies against all types of embezzlements.
Keep reading to know the most common types of construction frauds and prevention tips.
Top Construction Scams and Prevention Tips
Phony bills, overstated costs, wrong/unjustified construction claims are some of the most common types of scams you may come across in the construction industry. Check out the details of these frauds and some preventive measures that you should be careful about.
Phony Bills and False Payment Applications
For companies, it is never easy to verify a bill or payment application. Going down to each and every detail of an invoice when you have tons of invoices to check becomes hard.
Aware of this weakness, contractors, parties or employees generate phony bills and false payment statements to get extra money.
How to prevent: Verify all the material costs, wage estimates, invoices, and receipts when checking a payment application.
Removal, Diversion and Thefts
During a project, bill payment responsibility goes down to contractors. Fraudster subcontractors and other employees see it as an opportunity to befool you.
They can show you the bill of grade A. material, but use material of grade D. Or sometimes, subcontractors show that they buy a piece of particular equipment but never use it on the site and so on.
How to prevent: Make sure you can verify all the possible bill claims. If you can’t go to the site by yourself, assign this responsibility to a team member to examine and check everything is in place.
False Representations and Claims
Claims in the construction industry are usual. They are of many types including damage and delay claims etc. However, it is not necessary that all the claims made by contractors, subcontractors, or other employees are correct or justified.
For example, the contractor can claim that he hired laborers who worked in double shifts. But there may be no double shift work done on the site.
How to prevent: Opt for the best construction claims consultants Dubai based services to help keep you away from false construction claims. Professional claim consultants with industry experience can make sure you don’t bump into fake claims and get blackmailed for money.
Key Takeaways
Construction scams and frauds are of many kinds. However, it is never impossible to mitigate fraud risks. Be wary when you start a project and keep a check on every bill and invoice that comes to your table.
Above all, don’t forget to hire the best claim consultants to increase your protection chances from embezzlements. Claim consultants can help you settle all disputes without costing you extra money.
Claims Consultancy 