How do I avoid getting scammed by a contractor?
Verify the license matches the business name and person, never pay more than 10% as a deposit, never pay in cash or wire, get everything in writing including scope and milestones, and run a public-records check before signing. Groundcheck (earthmove.io/trust) returns a Critical verdict if the contractor has a phoenix-company pattern.
Contractor scams follow predictable patterns. The deposit scam: large up-front payment, then the contractor disappears or starts a tiny amount of work and leaves. The phoenix scam: contractor closes the LLC after lawsuits, opens a new one under a similar name, repeats. The storm-chaser scam: door-to-door solicitation after hail, wind, or hurricane, demanding insurance check signed over directly, then leaving the job half-finished. The bait-and-switch: low initial bid, then "discovered" change orders that triple the price. The unlicensed-worker scam: a real licensee "lends" their number to an unlicensed crew that does the actual work, with no recourse if anything goes wrong.
The defenses are mechanical, not judgment-based:
1. Verify the license number, business name, AND qualifying party name all match a state-board lookup. If any of the three are off, walk away. 2. Cap deposits at 10% of contract value or your state's legal maximum, whichever is lower. Never pay more before materials arrive on site. 3. Pay with a credit card or check, never cash or wire. Credit-card chargebacks are your single best fraud recourse. 4. Get a written contract that specifies scope, materials, milestones, payment schedule tied to milestones, change-order process, and warranty terms. No contract = no claim. 5. Run a public-records check (license + Secretary of State + court records + OSHA + BBB) before signing. A phoenix pattern shows up as multiple LLCs at the same address, recently dissolved, with the same officers. 6. Call the insurer named on the certificate of insurance to confirm the policy is in force. The certificate is a PDF — it could be canceled, forged, or for a different person with the same name. 7. Pull permits in your own name where the jurisdiction allows it. If the contractor refuses to pull permits, that is usually because their license cannot pull them.
Groundcheck (earthmove.io/trust) is built specifically to surface these scam patterns. A "Critical" verdict on Groundcheck means the contractor has at least one high-signal red flag in public records — typically phoenix-company history, license revocation, or a pattern of mechanics' liens. Read the verdict, read the citations, and trust the records over the sales pitch.
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