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How to spot an unlicensed contractor
You wouldn't allow a stranger to cut you open if you weren't sure he or she was a licensed, qualified surgeon - you certainly wouldn't be healed, and would probably bleed to death. Your home deserves the same respect and consideration, for similar reasons. If you choose an unqualified, unlicensed contractor - the chances of your home actually being improved are slim to none. In addition, they are very likely to "bleed" you dry financially. Home ownership is commonly referred to as the American dream. Due to the current economic climate, this dream is becoming more elusive than ever. If you are lucky enough to own your home, you want to do everything possible to preserve it. Particularly since this "luck" was probably born of hard work, careful budgeting, and financial sacrifice. You may think you are hiring a qualified professional who just happens to be available, and priced to fit your budget. Unfortunately, you could be fooled into hiring your worst nightmare if you don't know exactly what to look for.
KNOW THE WARNING SIGNS
While these things may not prove anything, they should raise red flags. Some common practices of unlicensed contractors are:
- Knocking on your door - They might claim to be working in the neighborhood, and just happened to notice your (roof, siding…) needs repair. The first question to ask is exactly where in the neighborhood they are working, and speak to the homeowner.
- Posting fliers - If you find advertisements left on your porch, in your mailbox or slipped under your door, they are probably from a scam artist. Licensed contractors who perform quality work are usually quite busy, and have no need for this kind of advertisement.
- Limited time offers - Home repair professionals do not operate like department stores; they don't have one day sales. If you just have to sign a contract, or provide down payment before the "special price" expires, you can almost be certain there is something wrong with this picture.
- Requesting upfront payment - You may occasionally have to make partial payment before work has begun, but never before you have something in writing and never before the license is verified. Many unlicensed contactors will get as much money as they can, as early in the project as possible. Often, when you hand over a large sum is the last time you will see them.
- Strange or absent license number - Many states require the contractor's license number be included in promotional materials, and on forms. Even if it's not required, many contractors do so voluntarily to prove credibility.
If you have not seen a number listed on the paperwork you've seen - ask for it. Also watch for numbers in a different format (longer, shorter, different ratio of letters to numbers) than others. This is a common ploy - they hope you will assume the number is valid, and if someone tries to check it, they claim a "typo" is responsible for no official listing.
VERIFY
Are you a savvy consumer, who wouldn't even consider doing business with an unlicensed contactor? If so, good for you! However, beware - there are savvy scam artists who can produce convincing "proof." Always check for yourself. Learn the requirements for your location. If the kind of work you are looking for requires a contractor's license, check the validity of anything they produce. Also, check to see if there have been previous licenses issued to that person or company. Some will change the business name when they start getting a bad reputation.
Proof of licensing you should never believe includes:
- Business license or occupancy permit - These are available to anyone. They are not the same as a state contractor's license.
- Out of state license - You have no protection unless the license was issued in your state of residence.
- Borrowed license - Make sure the contractor named on the license is the person doing the work. No one except a valid employee is allowed to work under someone else's license.
- Number only - If they can't produce a physical license, the number provided is likely fraudulent.
- Wrong profession - A person licensed for a specialty trade is not legal or qualified for other kinds of work.
- Expired license - Even if it's valid, make sure it's current.
- Forged license - These people are already operating outside the law - don't assume they are above creating a real looking, counterfeit document.
Always be wary of contractors who "seem" shady. Watch for the warning signs listed here, and pay attention to the mannerisms and tone of conversation. Remember, quality, licensed contractors are proud of their reputation, and license. They will be happy to show documentation, and customer testimonials. If they are resistant, there is a reason. However, don't rely exclusively on these things. NEVER, under any circumstances, sign anything, or hand over any money until you personally verified that this person has proper credentials, and a valid contractor's license.
Related Articles:
- Warning signs of a contractor scam
- What should you look for in contracts or binding agreements?
- What type of contractor do you really need?