​No License? No Job! Avoid Contractor Scams

By District Attorney Summer Stephan
 
Hiring a contractor to build an ADU, perform construction work, or a kitchen-and-bathroom remodel already comes with built-in stressors: choosing a quality company, affordability, staying on schedule; not to mention the disruption it has on the household.
 
The last thing consumers worry about can sometimes be the most costly: getting scammed.
 
Most contractors are honest and reliable. But inevitably there are cheaters working the system. Sometimes they are rogue contractors, but mostly they are unlicensed fraudsters who cut corners or skip town with your money.
 
The most common way consumers get ripped off is by trusting someone representing himself as licensed in a trade who wants to be paid up front. Frequently the phony contractor asks to be paid in cash, claiming they can begin work more quickly that way. Unfortunately, we have prosecuted cases where the scammer pockets the money and never comes back. 
 
Before you put off that remodel job for good, here are some tips to help you distinguish the good from the bad.

• Make sure your contractor is licensed. Check for disciplinary actions and workers compensation insurance on the Contractors State License Board (CSLB) website (http://cslb.ca.gov/).
• Be wary of anyone trying to convince you that since it may be a “small job” they do not need a contractor’s license. Any home improvement project over $1,000 requires a licensed contractor.
• Contractors cannot ask for more than 10% of the total cost of the project or $1,000 (whichever is smaller) as a down payment. Do not pay more than that amount before the project begins. 
• Be wary of door-to-door salesmen offering free inspections. Many times they will claim that there is a “serious” problem such as bad plumbing or leaky roof that needs to be fixed immediately.  
• Remember that they have an incentive to indicate that a problem exists.
• Do not let payments get ahead of the work. Payment schedules and project phases should be detailed in the contract. 
• Avoid paying in cash. If your contractor asks for cash only, it may be that they are operating outside of the law and do not want to be traced.  
• Ask for three references from prior customers and then check and verify that those references were satisfied with the contractor and his or her work. 
• The CSLB created a video to help you with the process of selecting a legitimate contractor for your job.

 
If you believe you have been scammed by a contractor, file a complaint with the Contractors State License Board.
 
The DA’s Consumer Protection Unit is made up of Deputy District Attorneys, Investigators and Paralegals dedicated to protecting consumers and law abiding businesses from fraudulent or unfair business practices. To report a consumer complaint, you can file a complaint online at: https://www.sdcda.org/preventing/consumer-protection/, call (619) 531-3507, or email [email protected].