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The Home Depot

5 Ways to Prevent a Contractor Scam

Pro Referral > Home Guides > General Contracting > 5 Ways to Prevent a Contractor Scam
5 Ways to Prevent a Contractor Scam

Though most contractors are as concerned about providing excellent service and stunning results as the folks who hire them, homeowners should definitely be careful when it comes time to choose the company they hire. It is unfortunate that, despite the industry's best efforts, contractor scams still exist; and while the number of dishonest contractors out there are far fewer than those who are on the up-and-up, it is important for homeowners to understand the hallmarks of an individual or company who is likely to provide poor service or--even worse--take your hard-earned money and run.


According to the Consumer Federation of America, shoddy or underhanded home improvement work represents the third most reported offense in the nation for 2011 (behind automobile and debt-relief complaints). The fact is, though, that contractor scams are perpetrated by a small number of individuals when compared to the vast majority of honest, decent service professionals who do good work. No checklist can guarantee with absolute certainty that the contractor you hire will be the perfect fit for your project, but the following five tips will go a long way in helping you avoid the handful of bad apples out there who are more concerned with a quick buck than they are with doing a good job.

  1. 1.Find Your Contractor Through a Reputable Source

    No reputable contractor expects to be paid in full for a job he or she has not performed yet!

    Whether it's an online service, a call to the Better Business Bureau, or a referral from a friend or family member who has used the company before, one of the most effective ways to find a good contractor is to go through a reputable source. Unscrupulous service professionals will have a very difficult time maintaining good standing with online home service companies like Redbeacon who screen their contractors and record reviews. Similarly, a company who does shoddy work won't be referred to you by your friends, family, and coworkers. Always look for a contractor with a proven record for good service and never hire anyone going door-to-door.

  2. 2.Ask Plenty of Questions

    A good contractor is well-aware that you are concerned with how much you spend and what that money will go toward. He or she will have plenty of experience in explaining any aspect of the job to you and will gladly break down the cost of his or her services. If you have a question, don't hesitate to ask--and make sure to ask plenty of questions before you hire! If a contractor gives you a hard time about a few preliminary questions, you should probably hire someone else.

  3. 3.Check References

    Good contractors have a history of providing excellent service, and the homeowners who have used them before are often happy to tell others of how well their own projects turned out. Ask any prospective contractor for references and follow up with phone calls. You'll be happy you did.

  5. 4.Verify Business Information

    The phone number, business address, company name, and credentials of any contractor you hire should be up-to-date and verifiable. If these crucial elements of good business are missing, there's a very good chance that you are dealing with someone who is incompetent (at best) or dishonest.

  6. 5.Compensate Carefully

    Here's something to remember: No reputable contractor expects to be paid in full for a job he or she has not performed yet! Asking for full compensation upfront (especially in cash, but by check or card, too) is a hallmark of contractor scams. Most good contractors expect to be paid in increments that correlate to milestones during the project (X% when the project begins, X% at a specified mile-marker, the remaining compensation upon completion, etc.). Never pay the entire cost of the project before work has been completed and always use a check or credit card so your payment can be verified.

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