Avoiding Contractor Scams: Red Flags Every Homeowner Must Know

Contractor Fraud is Real

Thousands of homeowners fall victim to contractor scams every year. The average loss is over $10,000. Here's how to protect yourself.

Major Red Flags

1. Door-to-Door Solicitation

Legitimate contractors rarely go door-to-door. Be especially wary after storms when "storm chasers" target neighborhoods.

2. Pressure for Large Deposits

California law limits deposits to 10% or $1,000, whichever is less. Anyone asking for more upfront is either breaking the law or uninformed.

3. Cash-Only Demands

Insisting on cash payments is a sign the contractor is avoiding records—and possibly taxes.

4. No Written Contract

Any project over $500 in California requires a written contract. No exceptions.

5. No License Information

If they won't provide a license number or it doesn't verify on the CSLB website, walk away.

6. No Physical Address

A P.O. box or no address at all makes it impossible to find them if things go wrong.

How Bidroom Protects You

Every contractor on Bidroom is license-verified, and our escrow system ensures you never pay for incomplete work.