How to Recognize 6 Common Contractor Scams—Before You Get Ripped Off

It’s hard enough settling on the right tile for the bathroom remodel or reaching a compromise with your significant other on the new cabinets for your kitchen. You don’t need to throw a shady contractor in the mix.

While many contractors are honest, hardworking, upstanding citizens like you and me, the industry isn’t without its bad apples. If you’re not careful, you could fall prey to one of these scammers and schemers—and wind up holding the bag for thousands of dollars of repairs.

That said, there are some telltale signs that you have a nefarious contractor in your midst. Here are a six tip offs that you may be on the receiving end of a scam.

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They Ask for a Large Payment Upfront

It’s not uncommon for a contractor to ask for a payment before they begin a job. Shelling out a small percentage of your quoted costs is kind of like putting a down payment on a house or a car. However, the key word here is “small.” Any contractor who requires you to pay 100% of their estimated price could be planning to cut and run before the ink on the check is dry. Ten percent—or $1000 for a smaller project—is a more realistic amount. If your contractor asks for anything more, you could have a scammer on your hands.

They Offer to Pay Your Deductible

This one is most frequently seen with roofers. The scam runs like this: a roofer tells you to file a roof repair claim with your insurance company for storm-related damage. Don’t worry, though, they say—they’ll refund your deductible once the money comes in, or they offer to waive the cost entirely. If that sounds too good to be true, rest assured, it is. Scams like these constitute insurance fraud, and if discovered, could get you blacklisted from purchasing homeowners’ insurance for years. Take a word from the wise and and avoid any roofer that promotes a scam like this.

They Quote You a Price That’s Way Below Other Bids

A cutthroat price on a home project might seem like a dream come true—but if a contractor comes in way below competing bids, that should raise a big red flag. Scammers often use a super low quote to lure you into accepting their bid, then suddenly raise the price once the contract is signed. They might tell you the market cost for materials has gone up, or that an unforeseen issue has come up. It’s a bait-and-switch tactic that contractors use to squeeze more money out of unsuspecting homeowners. Always get at least three bids before settling on a contractor—and if one of the prices seems way off, ask that contractor to explain why the price is so low.

They Tell You “No License/Insurance/Permit Necessary”

A contractor who offers a discount for unlicensed or uninsured work is just a disaster waiting to happen. If anything goes wrong, you’ll be the one left on the line for damage. Same thing goes for permits. A very small project may not require a permit, but most do, especially the job includes demolition, electrical work, or plumbing. Skip the permit and you could be looking at a fine. Also, it’s a pretty fair assumption that your contractor is using unqualified labor to make their repairs. Check licenses and proof of insurance before work begins—and make sure your contractor pulls any necessary permits well in advance.

They Come to You

Be wary of any contractor who goes door-to-door looking for work. In this scam, contractors show up at your doorstep, telling you they can get you a scandalously low rate on driveway paving, siding replacement, fencing or a new roof. Why the low price? Well, they just finished a job down the street and happen to have some extra materials. They noticed that you need a new driveway/siding/fence/roof/whatever and wondered if you might be interested. If you hear this, all the alarms should start going off. Usually it means they have recalled, stolen or low-grade materials they’re trying to offload. And they’re planning to install them as quickly as possible and leave you holding the bag for their poor workmanship. Don’t fall victim to these scammers. Tell any contractor who comes to your door to amscray.

Something Just Feels Off
You can’t put your finger on exactly what it is, but something about your contractor just strikes you as… not right. Maybe they seemed a little rushed when they handed you the contract. Maybe they looked nervous when you first met, or they’re way too hard to get a hold of these days. Whatever it is, trust your instincts. If something feels off, it probably is. It’s fine to look for another contractor if you need to—after all, it’s your home!

Spot the Fraud: Signs You Need to Fire Your Contractor ASAP

Contractors don’t exactly have the best reputation. Search “contractor scams” and you’ll turn up loads of articles enumerating the latest contractor ploys. Nightmare contractor stories are about as numerous as the stars. For a business that deals with something so important—your home—home repairs sure do attract some shady characters.

There are plenty of reasons why a relationship with a contractor goes south. Some of it you can probably chalk up to unrealistic expectations—some homeowners want their builder to bring them the world on a platter. And sometimes it’s just a matter of juggling too much. Very few contractors are able to hire administrative employees, and so they end up doing most of the scheduling and paperwork themselves while trying to get your kitchen remodel done.

And then there are the people who see a trusting and vulnerable homeowner with little-to-no knowledge about their home’s inner workings, and think, cha-ching! It’s this last category we’re here to discuss today, specifically how to sniff one out and boot them from your life before they turn your dream home into a nightmare. Here are six surefire signs that you need to cut ties with your contractor—and cut your losses while you still can.

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They Can’t Show You Any Credentials

Here’s where it pays to do a little detective work right off the bat. In many states, skilled work, like the jobs performed by electricians and plumbers, must be completed by a licensed contractor. So don’t be afraid to ask to see a copy of your contractor’s license—a pro won’t be offended. Also ask to review their proof of insurance and a list of references, too. If your contractor gets cagey or can’t produce credentials like these, set them loose. They may not be as much of a “pro” as they say they are.

They Want You to Pay for the Whole Project Up Front

If your contractor hands you a bill before they get started, don’t panic! It’s customary for pros to ask for a portion of their initial quote up front—but typically, it’s no more than 30 to 50% of the quote. However, what they should not do is ask you to fork up the entire estimate right on the spot. It makes it way too easy for crooked contractors to cut and run, and anyone worth their salt knows better than to ask for 100%. That’s a definite red flag right there.

You Can Never Get Them on the Phone

Having trouble reaching your contractor to get a project started? It may be time to say sayonara. No one can answer the phone every time it rings, of course, but your contractor should make an effort to get back to you promptly. If you feel like your contractor is ghosting you, it’s time to start looking for new candidates. After all, there are plenty of workers who will make you a top priority—or at least call you back!

They Break Your Contract

This one is tricky, since you don’t want to go around accusing contractors willy nilly. A breached contract is a serious offense that often gets settled in court, so you’ll want to have your facts straight before you approach your contractor. You’ll want to have documented proof—photos, receipts and other records—showing that your contractor has broken your agreement. And first, you should have an open—but firm—conversation with your builder and air your issues. If your contractor makes no effort to remedy the problem, you may just need to get a lawyer involved.

Their Quote Comes In Way Below Other Bidders

A deal is a deal, except when it comes at the cost of quality, materials, or skill. You should always collect at least three separate bids for a home remodeling project. For one thing, it’s a great way to get a feel for the average price of this kind of work. But it will also give you a sense of your contractors’ trustworthiness, as well. If one of those bids seems way too low, it’s not necessarily a reason to bite. You get what you pay for, and with contractors, as often as not, a low bid is a sign that something is wrong. Maybe the contractor is using recalled materials, hiring less-than-skilled subcontractors or maybe they’re planning to do the work as quickly—and shoddily!—as possible, and then cut and run. Whatever the reason, you’ll probably wind up paying for it later, so it’s best to avoid these kinds of cutthroat quotes.

They Can’t Stick to a Schedule

Delays happen in the construction business. Estimates are off, materials need to be reordered, unpredictable weather pops up—it’s not uncommon for a job to take longer than expected. However, a contractor who keeps missing their deadlines—or doesn’t show up to work some days—is no one you want working on your home. Do yourself a favor and give them the boot. In the long run, your wallet will thank you!