Scammed by a Contractor? Exactly What to Do, in Order (2026 Guide)
Act in this order: stop any further payments, document everything, send a written demand letter, then report to your state contractor board, state attorney general, and the FTC — and file in small claims court if the amount fits. Speed matters most on the money side: a credit-card chargeback has time limits, and so do license-board complaints in some states. Here’s the full playbook.
What Should You Do in the First 48 Hours?
- Stop the bleeding. Cancel any scheduled payments. If you paid by credit card, call the issuer and open a dispute (chargeback) — the Fair Credit Billing Act protects you, but issuers typically want disputes within 60 days of the statement.
- Write down the timeline while it’s fresh: dates, payments, promises, conversations. Save every text, email, voicemail, and the contract.
- Photograph everything — the unfinished or botched work, materials left behind, damage caused.
- Verify their license status on your state contractor board site. Unlicensed? That’s leverage: many states make unlicensed contracting a crime, and some (like California) let you sue to recover everything you paid, regardless of work done.
- Don’t sign anything new — especially not a “settlement” they push that waives your right to complain.
Where Do You Report a Contractor — and What Does Each Agency Actually Do?
| Where to report | What it can do | What it can’t do |
|---|---|---|
| State contractor licensing board | Investigate, fine, suspend or revoke the license; some states have recovery funds that pay victims | Move fast |
| State attorney general (consumer protection) | Pattern enforcement, mediation programs, lawsuits against repeat offenders | Guarantee your individual refund |
| FTC — reportfraud.ftc.gov | Feeds the national fraud database used by law enforcement | Resolve individual cases |
| Local police (non-emergency) | A report is essential if it’s theft (took money, never showed) — insurers and courts will ask for it | Chase “bad workmanship” disputes |
| BBB + Google reviews | Public pressure; some businesses settle to protect ratings | Compel anything |
Check your state’s contractor recovery fund. Several states (California, Maryland, Virginia, Arizona, and others) maintain funds that compensate homeowners harmed by licensed contractors — often up to $15,000–$30,000 — even when the contractor is broke. This is the most under-used remedy in contractor fraud.
How Do You Demand Your Money Back?
Before suing, send a demand letter — courts expect it, and it settles a surprising number of cases:
- One page: what was contracted, what was paid, what failed, what you demand (refund or completion), and a 14-day deadline
- Cite specifics: “$6,500 paid on [dates]; work abandoned [date]; state license #XXXX”
- State your next steps plainly: license board complaint, recovery fund claim, small claims filing
- Send by certified mail + email. Keep copies — the letter itself becomes evidence
Is Small Claims Court Worth It?
Usually yes, if your loss fits the limit — it’s cheap ($30–$100 filing fee), fast (weeks to a few months), and you don’t need a lawyer:
| State (examples) | Small claims limit |
|---|---|
| Texas | $20,000 |
| California | $12,500 (individuals) |
| New York | $10,000 (NYC) |
| Florida | $8,000 |
| Most states | $5,000 – $15,000 |
Bring the contract, payment records, photos, your timeline, and the demand letter. Winning gets you a judgment — collecting it is a second step (wage/bank levies, liens), which is exactly why the recovery fund route above is often better against a vanished contractor.
How Do You Avoid Round Two?
Repair scams have an afterlife: “recovery scammers” call victims claiming they can get your money back for an upfront fee. Hang up. And before hiring the replacement contractor, run the full vetting pass — deposit rules, pressure-tactic radar, and license verification — because half-finished projects attract a second wave of opportunists.
Frequently Asked Questions
Can I get my money back from a contractor who disappeared? Possibly — in this order of likelihood: credit-card chargeback (if you paid by card), your state’s contractor recovery fund (if they were licensed), small claims judgment, police report if it’s outright theft. Cash paid to an unlicensed stranger is the hardest to recover — which is why payment method matters so much upfront.
What’s the difference between a scam and just bad work? Took money and never performed = fraud/theft (police + AG). Performed badly = a civil dispute (license board + demand letter + small claims). The reporting path differs, but document everything either way.
Is it worth reporting if I’ll never get my money back? Yes. License boards act on complaint patterns — your report may be the third one that triggers a suspension and saves the next family. It also creates the paper trail you need for the recovery fund or court.
Can I withhold remaining payments on a botched job? Generally you can withhold for documented incomplete/defective work, but follow the contract’s notice terms and put defects in writing first. Be aware the contractor may threaten a mechanic’s lien — written documentation is your defense.
Do I need a lawyer? Not for small claims or board complaints. Consider one if the loss exceeds your small-claims limit, there’s structural damage, or a lien has been filed against your home.
Last updated: June 10, 2026. Sources: FTC (reportfraud.ftc.gov); Fair Credit Billing Act dispute rights; state contractor recovery funds (CSLB, Maryland MHIC, Virginia DPOR, Arizona ROC); state small-claims court limits. This article is consumer information, not legal advice.