Local Start-Up Leverages AI to Combat Contractor Scams

In an effort to safeguard homeowners from contractor scams, the local start-up Better Bid has developed an innovative SMS-based system that utilizes artificial intelligence (AI). This service aims to connect homeowners with reliable contractors while assessing the credibility of these service providers through a proprietary algorithm.

How Better Bid Works

Better Bid’s system evaluates potential contractors by analyzing phone and text interactions, assigning a grade based on various indicators of trustworthiness. According to Alex Kimmich, Founder and CEO of Better Bid, the algorithm compares reliable contractors with those suspected of fraudulent activities. “What we do is, with the use of this proprietary AI, we compare the scams versus the non-scams,” Kimmich explained. “We use a variety of analytic indicators, such as intent; is the contractor saying things that seem not 100 percent truthful, or are they making claims about materials that aren’t true?”

This tool has reportedly helped to prevent tens of thousands of dollars in potential losses from scams, maintaining a zero percent scam rate across hundreds of jobs. Kimmich highlighted the confusion many people face while seeking home improvement services, which can leave them vulnerable to scams that risk significant financial loss.

A Growing Concern in Ontario

Scams targeting homeowners have become increasingly prevalent. According to Scotiabank, approximately 32 percent of homeowners in Ontario have fallen victim to home service scams, leading to losses of around $22 million in 2023. These scams disproportionately affect seniors and other vulnerable populations, heightening the need for a solution like Better Bid.

“It just made sense. Nobody is doing this right now. This is something that would probably cost a company a lot of money to do, so no company is ever really going to take the time to do it properly,” Kimmich noted. He emphasizes that his start-up is committed to helping people navigate the complexities of contractor selection.

Users of Better Bid can text their project details to the service, which will then provide the three best quotes from reliable contractors in their area. This process mitigates the risk of poor choices or bad referrals, ensuring homeowners receive qualified assistance for their projects.

The Future of AI in Home Services

Kimmich recognizes the skepticism surrounding AI integration into everyday life but believes that solutions like Better Bid demonstrate the positive potential of technology. He advocates for responsible AI usage that can benefit homeowners across the region and beyond. “There are proper ways for AI to be used,” he stated, underscoring the opportunity for small businesses to leverage technology effectively.

As Better Bid continues to expand its services, it not only aims to provide security for homeowners but also seeks to set a precedent for the responsible application of AI in various industries. This approach could pave the way for future innovations that prioritize consumer protection and trust in service transactions.