Contractor fraud refers to any illegal business practices that are employed by an individual contractor or a contracting firm that is hired to perform some type of construction work on a property. This could range from a renovation that uses substandard materials and workmanship to a repair project that is grossly over-billed.

Some signs that a contractor may be less than legitimate include selling their services door-to-door, having “leftover” materials from an alleged previous job, pressuring for an immediate decision, demanding payment up front or exclusively in cash, suggesting a lender the contractor knows personally, or having the homeowner apply for relevant building permits to put them in their name. If one or more of these events occur, it is likely that the contractor is fraudulent.

The biggest problem with pursuing justice against a fraudulent contractor is the tendency for the contractor to simply disappear once their scam has been discovered. If the contractor can be pinned down long enough to bring them to court, a homeowner can sue for poor work and potentially recover damages including the costs to redo the indented contract work correctly. 

There are a few steps to avoiding contractor fraud. First, get everything in writing. Leaving a paper trail ensures that an individual can prove their side of a story if things get taken to court. Next, research any projects including acquiring references from potential contractors as well as shopping around for multiple quotes. Finally, avoid payment up front and ensure that the contractor has all the relevant insurance and permits to perform the agreed upon tasks.

If you suspect that you may have been the victim of contractor fraud the first thing to do is remain calm. Any written agreements or financial statements should be found, preserved, and presented to a consumer rights attorney in order to build the best possible case to get you the compensation you deserve.