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Telltale Signs that This Contractor is a Fraud

Updated: May 19, 2023

Although we are far into the twenty-first century, some individuals are still adept at defrauding others. Fraud by contractors might take the form of subpar repairs or service proposals intended to defraud their customers. Although these contractors' scams can appear clear in retrospect, their cheap techniques may not be as visible at first look. Slick talkers and charmers are common characteristics of these con artists. It's always a bad idea to sign a contract that appears too good to be true, and contracting is no exception. A vital lesson anybody can learn is that if anything appears or sounds too good to be true, it often is.

Facility managers and homeowners employ contractors for various facility-related tasks every year. You must keep a close eye on your contractor for any signs of dishonesty. Do some research before getting started if you don't know what to expect or how much it will cost. There are several clear signals that a contractor is a fraud.

Lack of Licensure

There is a reasonable probability that a contractor who isn't properly licensed, insured, and bonded for the work you need to do is a fraudster. Always inquire about prior work and verify that the company's information is accurate before hiring a professional. There is a good chance that a contractor who refuses to show you the finished product and whose company information is either wrong or absent is only trying to make a fast profit at your cost.

Shabby Equipment

You can tell a lot about a contractor by presenting himself and taking care of his vehicle, tools, and equipment. Personal appearance, unclean or damaged equipment, and cars in bad shape are the first indicators that a business is a sham. The uniforms, new trucks, and the most up-to-date mobile phones and computers aren't the only things that make a construction firm excellent.

Less Competitive Pricing

If a contractor has a reduced price tag, it might signify that they will attempt to cheat you out of money. A contractor that quotes you a reduced price but then adds on additional costs, such as the cost of supplies, should be avoided at all costs. The contractor may not be a scammer, but this is a clue that they are unskilled and will not be able to finish your project.

Asking for the full payment up-front

Contractors often ask for a small portion of the total cost as a down payment in the building industry. In the eyes of contractors, this is the industry-standard start-up fee. If your contractor wants to collect the whole sum in advance, it's a red sign. This might indicate that the company's finances are shaky and that it would be unable to provide high-quality products and services. Some contractors ask for a deposit to cover the expense of acquiring particular supplies in advance of the project's completion. They refer to specific ceramic tiles; nevertheless, they seldom cover roofing materials and timber. Be wary of contractors that offer things like "I'll give you a discount if you pay me in cash." But do not fall for this, as they tend to run away with your money once you pay them in cash.

Letting you pay for bids and quotations

There's a problem if a contractor asks for payment before they offer you a price; therefore, don't do it. Legitimate contractors are willing to provide quotations and proposals for free since they are confident in their own expertise and standards. Be wary of low bids since there may be additional expenses that you're unaware of. Get many quotes and offers from different sources to prevent this fraud.


Everyone agrees that a contract is essential, particularly a written contract. Ensure that your contract specifies the job, the supplies to be used, a breakdown of costs, and a payment timetable. It's possible that smaller subcontractors don't deal with contracts regularly, but in a catastrophic scenario, the chances of someone being taken advantage of are considerable. Several general contractors specialize in minor work.

No Business Office

Take additional precautions and ensure that everyone who assists you is qualified and licensed by the appropriate state authorities. Not every contractor that shows up at your door is out to defraud you. For your protection, NAHB recommends that any contractor you work with should have an actual office location, as well as a valid phone number and email. This may assist you in finding out whether they're licensed and guarantee that you can reach them at all times.

Sudden changes in the proposed estimate

One of the most straightforward scams a dishonest contractor may pull on a customer is to make last-minute adjustments to the estimate. Choosing a shoddy contractor will result in an immediate price quotation without considering the level of damage or the repairs that need to be completed. In addition, the contractor will not even inform you of the potential costs that may be associated with the project.

No Reports and Updates

Hiring a contractor to help with a building or renovation job might weigh your shoulders. As a result, he needs to stay on top of things and provide you regular progress updates throughout the project. If even during the planning stage, you realize that the contractor only gives you occasional or no updates, you may want to look for another contractor.

You Need to Document Everything

If you suspect you're being conned, keep track of your progress and share it with someone you trust. Write down a few things every day in your employment notebook to keep track of your accomplishments and setbacks. If you suspect your contractor of dishonesty, have him removed from the construction site immediately. Notify the BBB, the local building inspector, and the state attorney general's office about the incident. The only way to enforce your contract, hold the contractor accountable and get justice is to speak with an attorney.




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