The Federal Trade Commission warns that home-improvement scammers may pressure people for an immediate decision, demand full payment up front, or steer them toward a preferred lender. The fastest way to avoid a contractor scam is to confirm the license and legal entity before signing anything - here is how to do both.
The Door-Knock Scam
After storms or disasters, unsolicited sellers may claim they have leftover materials or can start immediately. The FTC contractor guide recommends checking licenses and insurance with state or county government, getting multiple written estimates, and reading the contract carefully before you sign.
How to Vet a Contractor
- Search the relevant state or county licensing database directly and confirm the license belongs to the same legal entity requesting payment.
- Match the legal name, address, and website across state registration records and the seller's materials.
- Ask for proof of general liability and workers' compensation insurance, and call the insurer to confirm it is active.
- Check local down-payment rules; the FTC notes that some states cap what a contractor may request before work begins.
- Get the scope, price, timeline, and promises in writing before any money changes hands.
Signs to Slow Down On
- A quote that arrives after an unsolicited knock at the door, especially following a storm.
- Pressure to sign or pay the same day the estimate is given.
- A license number the seller provides that you cannot independently confirm on the state board's own site.
- A request for payment by wire, cash, or gift card instead of a traceable method.
Frequently Asked Questions
How do I verify a contractor's license is real?
Go directly to your state's contractor licensing board website and search the license number or business name yourself - do not rely on a number or link the contractor provides. Confirm the license is active and registered to the same legal entity that will sign the contract.
Is it normal for a contractor to ask for a deposit?
A reasonable deposit is common, but many states cap the maximum percentage a contractor can collect before starting work. Check your state's specific rule via the FTC's home improvement guide and never pay the full price up front.
What should I do if a contractor pressures me to decide immediately?
Treat urgency as a warning sign on its own. Legitimate contractors will let you get multiple bids and review a written contract before committing - if they won't wait, don't sign.
How can I check a contracting company beyond its license?
Run its legal name through state registration, BBB, and Google Business Profile in addition to the license lookup. A ProofReports search combines these checks into one summary so you can compare a contractor's registration, license status, and reviews in one place.
Use ProofReports data-source guidance to distinguish an unavailable check from a confirmed no-match.
Sources
- FTC's home improvement guide — Federal Trade Commission
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