How to File Contractor Fraud Complaints

Essential Documentation Checklist

• Written contract:
  • Original signed contract
  • All amendments or change orders
  • Proposal or estimate
  • Any written agreements
• Payment records:
  • Cancelled checks (front and back)
  • Credit card statements
  • Cash receipts
  • Payment schedule from contract
  • Invoices or bills
• Communications:
  • All emails with contractor
  • Text messages
  • Letters
  • Notes from phone conversations (date, time, what was discussed)
  • Voicemails (save or transcribe)
• Photographic evidence:
  • Before photos
  • During construction photos
  • After photos showing problems
  • Close-ups of defects
  • Photos of incomplete work
  • Date-stamp all photos
• Contractor information:
  • Business name and DBA (doing business as)
  • License number (or lack thereof)
  • Business address and phone
  • Contractor's name
  • Vehicle information (license plate, description)
  • Website or advertising
• Expert opinions:
  • Building inspector reports
  • Licensed contractor estimates to repair work
  • Engineer assessments
  • Code violation notices
• Financial impact:
  • Amount paid vs. work completed
  • Cost to fix problems
  • Alternative housing costs if home uninhabitable
  • Other damages

Why License Verification is Critical

• Confirms contractor is legally authorized to work
• Verifies insurance coverage
• Shows complaint history
• Confirms license is current and not suspended
• Protects your legal rights (many states allow voiding contracts with unlicensed contractors)

Do this BEFORE hiring, not after problems occur.

State Contractor Licensing Boards

Each state has contractor licensing authority. Common names:

• State Contractors Board
• Department of Consumer Affairs - Contractors License Board
• Board of Contractors
• Department of Professional Regulation

To find yours: Search "[Your State] contractor license verification" or check your state AG website

What to Check

• License status: Active, current, not expired
• License type: Matches work being done (e.g., general contractor, electrical, plumbing)
• Complaint history: Past complaints or disciplinary actions
• Insurance: Liability and workers' comp current
• Bond: Contractor bond in place (required in most states)
• Business entity: Registered business name matches

Red Flags When Checking License

• Contractor won't provide license number
• License doesn't exist or is expired
• License belongs to different person/company
• Multiple complaints or disciplinary actions
• License suspended or under investigation
• No insurance listed
• Business name doesn't match license

If you find red flags, don't hire. Report to licensing board.

1. State Contractor Licensing Board (File Here First)

Best option for: License violations, poor workmanship, contract violations, abandoned projects

Powers:

• Investigate contractors
• Discipline or revoke licenses
• Order restitution (refunds)
• Impose fines
• Mediate disputes

How to file: Most boards have online complaint forms. Provide all documentation listed above.

Timeline: Investigation typically takes 60-180 days depending on complexity

2. State Attorney General (File in Parallel)

Best for: Fraud, scams, deceptive practices, unlicensed contractors, multiple victims

Powers:

• Investigate consumer fraud
• File lawsuits against contractors
• Seek restitution for victims
• Pursue criminal charges
• Issue cease and desist orders

How to file: Find your state AG and file online consumer complaint

AG prioritizes: Cases affecting multiple consumers or involving significant fraud

3. Better Business Bureau

Best for: Creating public record, potential mediation

File at: BBB.org

Note: BBB has no enforcement power but complaints are public and may prompt contractor response

4. Local Building Department

Best for: Code violations, unpermitted work, safety issues

Powers:

• Inspect work
• Issue stop-work orders
• Require corrections
• Fine contractors for violations

How to file: Contact your city or county building inspection department

5. Consumer Financial Protection Bureau

If contractor fraud involved: Home equity loans, mortgages, or financing

File at: consumerfinance.gov/complaint

Required Contract Elements

• Contractor information:
  • Legal business name
  • License number
  • Business address and phone
  • Contractor signature
• Project details:
  • Detailed description of work
  • Specific materials to be used (brands, grades)
  • Project address
  • Start date and estimated completion date
• Financial terms:
  • Total contract price
  • Payment schedule tied to work completion
  • How changes will be handled
  • What's included and what's extra
• Legal protections:
  • Right to cancel (3-day cooling off period for home solicitation)
  • Warranty terms
  • Lien waiver process
  • Dispute resolution procedure
  • Insurance information
  • Permit responsibility
• Compliance statements:
  • Acknowledgment of right to cancel
  • Notice that lien may be placed if not paid
  • Workers' compensation coverage statement

Payment Terms Red Flags

• More than 33% deposit (most states limit deposits)
• Full payment before completion
• Cash only (no paper trail)
• Payment to individual not business
• No payment schedule
• Vague payment terms

Safe payment structure: 10% deposit, 3 payments tied to work milestones, final 10% after completion and final inspection

Before Hiring Checklist

• Verify license: Check with state licensing board
• Check insurance: Get certificate of insurance, call insurer to verify
• Get references: Contact at least 3 recent customers, visit completed jobs
• Check complaints: Search licensing board, BBB, Attorney General
• Get multiple bids: At least 3 written estimates
• Research company: How long in business, online reviews, local presence
• Meet in person: See physical office if possible
• Google the address: Make sure business location is real

Contract Red Flags

• No written contract offered
• Pressure to sign immediately
• Missing license number
• Vague scope of work
• No start/end dates
• No payment schedule
• Large upfront payment required
• Handwritten contract on generic forms

During Project Red Flags

• No permits obtained
• Different workers than expected (unlicensed subcontractors)
• Requests for cash payments
• Work not matching contract
• Inferior materials
• Contractor rarely on-site
• Rushed work
• Unwillingness to address concerns

Payment Best Practices

• Never pay 100% upfront
• Limit initial deposit to 10-20%
• Tie payments to completed milestones
• Withhold 10-20% until final inspection
• Pay by check or credit card (paper trail + dispute rights)
• Make checks to business name, not individual
• Get lien release before final payment
• Get receipts for all payments

Case 1: Unlicensed Roofing Scam - $18,000 Loss

Situation: After storm, door-to-door contractor offered to replace roof using "leftover materials from neighborhood job."

What happened:

• Demanded 50% deposit ($9,000)
• Started work without permit or contract
• Work was substandard, failed inspection
• Contractor disappeared when problems identified
• License number was fake
• Had to hire licensed contractor to fix, cost additional $18,000

Outcome: AG filed criminal charges. Contractor convicted of fraud, ordered to pay restitution. Victim received partial recovery from state contractor fund.

Lesson: Always verify license BEFORE signing contract or paying deposit.

Case 2: Kitchen Remodel Abandonment - $35,000

Situation: Licensed contractor signed $50,000 contract for complete kitchen remodel.

What happened:

• Paid 70% upfront ($35,000) - contractor claimed needed for materials
• Work started but contractor rarely on-site
• After 3 weeks, contractor stopped returning calls
• Kitchen torn apart, no materials on-site, work less than 20% complete
• Filed complaint with licensing board

Outcome: Licensing board investigation found contractor took deposits from 12 homeowners totaling $340,000. License revoked. Criminal charges filed. Victims eligible for recovery fund claims up to $25,000 each.

Case 3: Shoddy Foundation Repair - $45,000

Situation: Licensed contractor quoted $25,000 for foundation repair. Work completed but problems persisted.

What happened:

• Contractor used inferior materials (not specified in contract)
• Work didn't meet building codes
• No permits obtained
• Structural engineer found work inadequate and dangerous
• Contractor refused to fix problems
• Had to hire new contractor to completely redo work: $45,000

Outcome: Filed complaint with licensing board and AG. Licensing board mediated dispute. Original contractor agreed to pay $30,000 restitution. License placed on probation. Homeowner sued for remaining $15,000 in small claims and won.