Contractor red flags
Home repair scammers use the same handful of tactics over and over. Learn them once and you'll recognize them at your door.
Most contractors are honest people who want to do good work and get paid fairly. But home repair scams are common enough that the Federal Trade Commission keeps a list of the tactics scammers use. They tend to show up when people are stressed: right after a storm or when something breaks.
The good news is that the warning signs are predictable. If you know them, you can slow down, check the facts and walk away before you lose money.
The FTC's warning signs
According to the FTC's guide, How To Avoid a Home Improvement Scam, scammers often:
- Knock on your door looking for business because they're "in the area"
- Say they have materials left over from a previous job
- Pressure you for an immediate decision
- Ask you to pay for everything up front, or accept only cash
- Ask you to get any required building permits
- Suggest you borrow money from a lender they know
Here's what each one looks like in real life, and what to do instead.
The door-to-door "we were in the area" pitch
A truck pulls up, and someone says they just finished a job down the street and noticed your driveway is cracked or your roof is missing shingles. The Arizona Attorney General adds a related trick: a "free" inspection that suddenly finds urgent problems you never noticed, in its home improvement scam warning.
What to do: Take their card and say you'll think about it. Don't let anyone onto your roof or into your attic. If you're worried, have a contractor you found yourself take a look.
"Leftover materials" and too-good deals
An offer to use leftover asphalt, shingles or paint at a big discount is a classic opener. The materials may be poor quality, the work may be rushed, or the price may climb once they start.
What to do: Treat any deal that depends on acting today as a reason to slow down.
High pressure and "today only" prices
Pushing you to sign right now, a price that expires when they leave, or appeals to fear ("this could collapse any day") are all ways to stop you from checking them out.
What to do: A legitimate contractor will give you a written estimate and time to compare it. See how to compare quotes.
Cash only, or big money up front
The FTC says not to pay the full amount up front and to never make the final payment until the work is done and you're satisfied. Some states limit how much a contractor can ask for as a down payment; check with your state or local consumer agency. The Arizona Attorney General, for example, advises keeping a down payment to no more than one-third of the total.
What to do: Pay by check or card so there's a record, and tie payments to finished stages of work.
Asking you to pull permits, or steering you to their lender
A contractor who wants you to get the permit may not be licensed to pull one. A contractor who offers to arrange financing may steer you to a high-cost loan secured by your home. The FTC warns never to agree to contractor-arranged financing without shopping around, never to sign blank or unread documents, and never to transfer your deed without talking to an attorney.
No written contract
Ask for a written contract even if your state doesn't require one, the FTC says. A contractor who won't put the work, price, dates and their license number in writing is telling you something. Never sign a contract with blank spaces.
Storm chasers
After hurricanes, hail and tornadoes, out-of-town crews often go door to door. California's Department of Insurance lists signs to watch for after a disaster: no local office or phone number, no references, demands for cash up front, very general estimates and bids far below others, in its disaster scam guide. It also warns against paying large amounts for temporary repairs, since you may need that money for the permanent fix.
Report damage to your insurer first and make only temporary repairs until the adjuster sees it. Our guide to hiring a roofer covers insurance claim basics.
If you already signed
You may still be able to back out. Under the FTC's Cooling-Off Rule, many sales made at your home can be canceled until midnight of the third business day after the sale. The rule doesn't cover everything; exceptions include emergency repairs and repair work you invited the seller to do. Your state may give you extra rights.
- Find the cancellation form in your contract, or write a short letter saying you're canceling.
- Sign, date and mail it to the address on the contract before the deadline. Certified mail with a return receipt gives you proof.
- Keep copies of everything.
Where to file a complaint
- Your state attorney general or consumer protection agency. The FTC lists these first. In Arizona, for example, complaints go to the Attorney General's consumer complaint form. In South Carolina, the Department of Consumer Affairs takes consumer complaints through its website and refers them to other agencies when needed.
- Your state contractor licensing board, especially if the contractor is unlicensed or broke licensing rules. See how to check a contractor license.
- The FTC, at ReportFraud.ftc.gov.
- Local police, if you were defrauded or threatened.
Keep your contract, receipts, photos and notes of every conversation. They make any complaint much stronger.
Hire safely next time
The best protection is finding the contractor yourself, checking them out and getting everything in writing. Start with how to hire a contractor, or send a free match request to hear from local pros.
Common questions
A contractor knocked and says my roof is damaged. What should I do?
Thank them, take their card and don't sign anything or let them on the roof. Check the damage yourself from the ground or have a contractor you found inspect it. Then check that contractor's license, insurance and reviews before hiring.
Can I cancel a contract I signed at home?
Often, yes. The FTC's Cooling-Off Rule generally lets you cancel many sales made at your home until midnight of the third business day. Exceptions include emergency repairs and repairs you asked the seller to come do. Cancel in writing and keep a copy.
Where do I report a contractor scam?
Your state attorney general or state consumer protection agency, your state contractor licensing board if the contractor is licensed or should be, and the FTC at ReportFraud.ftc.gov.
Is it a red flag if a contractor wants a deposit?
A reasonable deposit is common. The red flags are asking for the full price up front, demanding cash only, or a down payment above what your state allows.