7 Signs Your Contractor is a Fraud

The craftsman blog

I've been a contractor for more than a decade so I can tell you some tell tale signs that should raise red flags during the initial conversations with your potential contractors.

How Do I Know?


A legitimate contractor will have a current license, liability insurance that covers any accidents, and worker’s compensation insurance to cover his workers who may get injured on the job.  Be sure to check the contractor’s credentials with your state’s licensing board and ask for proof of insurance.

No Licensure or Insurance


Look for a contractor with a permanent physical address, business phone number and website.

No Address


This isn’t a deal breaker but a contractor that was only incorporated a month ago is a potential red flag.  The longer they have been in the business, the more confident you can be that they are the real deal.  It’s a risk to hire a brand new company, but you can sometimes get a deal that way, just be wary.

Length of  Business


Ask for references. And check them!  A reputable contractor will have no problem providing you with the names and contact information of past clients.  Give the clients a call. 

No References


Depending on what kind of work you are looking to hire out, a reputable contractor will typically ask for a small deposit to cover the cost of materials and pre-construction costs, and then will ask for regular payments as work progresses.

Requiring  Large Deposits


When signing a contract, be sure to read it carefully and pay attention to the details. It should include a detailed description of the work to be done, the materials to be used, the start and completion dates, and the total cost. 

No Contract


Permits and inspections are required so that you as the homeowner can be sure that the work is being done according to code. The inspector (as much as they drive me nuts and make my life difficult) is an unbiased 3rd party to ensure everything is done properly and you are safe.

Not Pulling Permits

Trust but verify.  When you do find a contractor that is the real deal be sure to thank them and share them with all your friends.  That will help the good guys thrive and the bad apples rot away quietly making the crop of contractors better every day.

Get my free downloadable ebook for a simple primer on the tips I have found most useful from decades of this kind of work.

Want bonus Tips?