Jan 12, 2025
It’s kind of hard not to address the elephant in the room for one Illinois resident when it comes to their roof.
Orange Elephant was a roofing company advertising its services in six U.S. cities, including Chicago. For Kirby Reese, one of its customers, that promise turned into a nightmare. Reese hired the company to repair her roof, paying $25,725.34 in insurance money.
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But instead of completing the job — or even applying for a permit — Orange Elephant pocketed her money.
"I guess that's the question," Reese told CBS, answering their inquiry of where the cash went. "I have no idea."
Unfortunately, Reese wasn’t alone in her experience. Here's what happened to Kirby and others, along with tips to help you avoid falling victim to similar scams when doing improvement projects on your home.
A roofing scam that affected hundreds
Reese wasn’t the only homeowner to get burned by placing her trust in Orange Elephant. A Chicago Heights resident handed over $5,000, while two South Carolina homeowners collectively paid $23,000. One frustrated customer visited the company's headquarters and recorded a video of the abandoned office. CBS News later found customer files scattered across the empty space.
In total, an estimated 350 customers lost their funds. And the damage extended beyond homeowners. Contractors who worked with Orange Elephant faced unpaid wages and tarnished reputations.
"We were being told that everything's getting better, people were paid, and we come to find out the subcontractors all over the nation — from South Carolina, where no one was getting paid,” the former manager Stephen Cox told CBS News.
Cox resigned in May after hearing from unpaid suppliers. At the time, the company owed him $19,000. Another former manager, Mike Schmalz, also resigned, fearing the ongoing issues would damage his reputation.
In response to the problems, the state of Illinois revoked Orange Elephant's business license. After leaving the company, Cox and Schmalz started their own businesses, aiming to rebuild trust. Schmalz even waived profits on unfinished jobs to assist customers left in the lurch.
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How to avoid falling victim to a remodeling scam
Sadly, the homeowners who suffered losses caused by Orange Elephant are part of a larger trend. Research from JW Surety Bonds reveals that about one in 10 Americans has been scammed by a contractor.
While it’s not always possible to avoid such scams — Orange Elephant initially appeared reputable — there are steps you can take to minimize your risk:
- 1. Watch for rapid expansion: Be cautious of contractors who open multiple locations in a short period of time. Over-expansion can signal instability.
- 2. Beware of high-pressure tactics: Legitimate contractors won’t pressure you into making immediate decisions. Take your time to evaluate options.
- 3. Avoid full upfront payments: Never pay the full amount before work begins. Instead, agree to partial payments tied to project milestones.
- **4. Be wary of permit requests: Contractors should handle building permits themselves. If they ask you to pull permits, consider that a red flag. The Federal Trade Commission (FTC) also recommends checking with local home builders associations for complaints. Whenever possible, seek recommendations from friends or family. A contractor who has done quality work for someone you trust is more likely to deliver reliable results.
Hopefully, by following these tips, you can protect your money and ensure you don’t end up with unfinished projects or an unsafe roof over your head.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
