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How to Spot a Contractor Scam Before They Cost You Big Money

Contractor Scam

It should go without saying that life is full of surprises. As such, sometimes things happen entirely out of the control that leaves us needing to perform repairs or having to recover from a traumatic event.

Unfortunately, as much as we’d like to think that everyone around us has good intentions, some people take advantage of the dire circumstances life throws our way. And, instead of lending a helping hand, they look to make a profit from someone’s misfortune, or someone’s lack of knowledge.

This is a common occurrence after a natural disaster, and in many other circumstances when we find ourselves in need.

Keeping this in mind, contractor scams are a common occurrence today. From plumbing contractor scams to fake gas inspectors, there are several telltale signs of this unfortunate behavior and how to avoid it.

Contractor Scam
Contractor Scam


Many times after a disaster such as a flood, tornado, or hurricane, contractors might go door-to-door to see if anyone needs repair work. This also occurs in new, developing neighborhoods as well.

If you’re ever approached by anyone claiming to be a legitimate contractor, ensure that you ask to see proper contractor licensing before committing to having any repair work performed.

All contractors, including electricians and plumbers, must be licensed within the state that they’re operating in and are required to complete continuing education as well. If they don’t have a proper state-issued contractor license, you should avoid working with them at all costs and consider reporting them to your local authorities.

Large Deposit Requirements

One of the telltale signs for spotting a masquerading contractor is the requirement for extraordinarily large deposits before beginning work.

Most states have laws regulating the amount of a deposit that a contractor can ask for upfront to begin work. In most states, this rate ranges from 10 to 20 percent to as much as 30 percent. If you’re being asked to fork over a large sum of money upfront that meets or exceeds the 30 percent range, chances are you’re possibly the target of a scam.

If the contractor asks for the full amount, then this is definitely a sure sign that they are not who they say they are, and you should report them immediately.

Lack of Business I.D.

Not only should your contractor be state-licensed, but they should also have visible proof that they actually do perform contractor work. If a would-be contractor approaches you and does not have a physical address for their business, then this is a good sign that they’re trying to scam you.

In addition to this, a genuine contractor will most likely have a business card with his or her business address, phone number, and email address printed on the card. But, you must note that a business card is not qualifying “proof” of a legitimate contractor business.

Anyone can make their own business card, but the information on the card should be properly cross-referenced with local resources such as your local Chamber of Commerce, or the Better Business Bureau to validate any credentials.

You should also note that most professional contractors wear uniforms, have work vehicles with company logos, a physical place of business operation, and can easily be verified by local resources.

Ask Around

As previously stated, genuine contractors will have proof of running a legitimate business. Even after you’ve been shown this proof, it’s always a good idea to ask around town about the contractor to see if they’re legitimate or not.

Most contractors have a portfolio of work that they’ve completed or, at the very least, a list of references that you can call to verify. This might include pictures of past work around the local area or names of local businesses that can verify their relationships.

If a contractor cannot provide you with proof of any past business relationships, chances are this person is out to take advantage of you.

No matter how trusting we are as people, the hard truth remains that some individuals are simply out for their own benefit, and don’t care about your misfortune.

Everyone goes through a time of need in life. And if you’ve found yourself needing repair work that can be provided by a contractor, your safest option is to ask around your local area about legitimate contractor services. This way you won’t have to worry about being scammed.

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