What to Do If a Contractor Took Your Money

What to Do in the First 24 Hours

If someone is threatening you, trespassing, trying to enter the home, or demanding payment in person, do not confront the person alone. Call local law enforcement.

Save Evidence Before It Is Lost

Keep one paper folder and one electronic folder. Preserve original files and dates.

• The contract, estimate, change orders, cancellation notice, warranty, and payment schedule
• Advertisements, business cards, license number, legal name, address, phone number, and vehicle information
• Checks, statements, financing papers, receipts, app records, and deposit slips
• Emails, texts, voicemails, messages, and a log of calls and missed appointments
• Before-and-after photos, video, camera footage, and materials left at the property
• Permit records, inspection results, code notices, and any stop-work order
• A list of promised work, completed work, defects, damage, missing materials, and payments
• Names and contact details for workers, subcontractors, suppliers, neighbors, inspectors, and witnesses
• Independent written estimates showing what it will cost to finish or correct the work
• Any lien notice, lender notice, collection letter, court paper, or demand from a subcontractor or supplier

Keep private records off public posts. Give copies only to the bank, insurer, regulator, lawyer, police, or court that needs them.

For a more detailed photo and record checklist, use our guide to document home damage.

Try to Stop or Dispute the Payment

Contact the payment company immediately. If you approved the payment but the contractor did not perform, say that clearly. Do not call an authorized payment unauthorized. Ask which dispute covers non-delivery, incomplete service, or misrepresentation.

Send One Clear Written Demand

The FTC recommends trying the contractor first and following calls in writing. Send the demand by a trackable method and email. Keep a complete copy and delivery proof.

State facts, not insults. Include:

• Your name and the project address
• The contract date, total price, and amount paid
• The promised work and dates
• What was not done, abandoned, defective, or damaged
• The exact result you want, such as return of the unearned deposit, removal of a false charge, or a written plan to correct specified work
• A specific response date that does not waive a legal deadline
• A request for copies of permits, receipts, warranties, subcontractor information, and proof that suppliers were paid

Do not threaten arrest, violence, public humiliation, or actions you cannot legally take. A demand letter is evidence that you tried to resolve the problem. It is not a court order and does not guarantee payment.

Contact the Right State and Local Offices

There is no single national contractor complaint office. State and local law controls licensing, deposits, bonds, liens, and recovery funds. Use an official state website to find the regulator.

The federal consumer complaint guide explains escalation. Use the state consumer office directory to find the correct agency.

Our guide to contractor licensing, insurance, and permits explains what records to request and why a business registration is not the same as a trade license.

Ask About a Contractor Bond or Recovery Fund

A contractor bond is not homeowners insurance or liability insurance. It may pay certain valid claims, but covered losses, amounts, forms, and deadlines vary by state.

Some states have a recovery, guaranty, or restitution fund. This is not a grant. It may require a licensed contractor, timely complaint, owner occupancy, or an uncollected judgment. Caps and funding limits may apply.

1. Ask the licensing board whether a bond was active on the contract date.
2. Request the surety company’s name, bond number, and claim form.
3. Ask whether a recovery fund exists and what event starts its deadline.
4. File every required complaint, bond notice, or court document on time.
5. Keep copies and proof of delivery.

Protect the House From More Damage

You may need temporary work before the dispute ends. Photograph first, limit work to safety or damage prevention, and get an invoice separating temporary protection from permanent repair.

• Call the homeowners insurer promptly when the contractor caused sudden damage or when a covered event, such as a storm or fire, is part of the loss. A policy may cover some resulting damage even when it does not pay to correct poor workmanship itself.
• Ask the original contractor for liability insurance information, but verify coverage directly with the insurer.
• Use an independent licensed contractor, engineer, electrician, plumber, roofer, or inspector when the defect needs expert proof.
• Check permit records before covering walls, wiring, plumbing, roofing, or structural work.
• Do not sign a completion certificate, final inspection approval, lien waiver, release, or settlement unless it is accurate and you understand the effect.

Do not ignore lien notices.

In some states, an unpaid subcontractor or material supplier may claim lien rights even when the homeowner paid the main contractor. The notice, deadline, defenses, and homeowner protections vary greatly. Save every preliminary notice, invoice, certified letter, and court paper. Contact legal aid or a construction lawyer quickly.

Before paying a replacement contractor, compare a complete written scope and payment schedule. Our contractor bid worksheet can help you compare the same work, materials, permits, warranties, and payment milestones.

When Contractor Financing, a Lien, or Home Equity Is Involved

A contractor complaint and loan dispute are different. Notify both contractor and lender in writing. Request the credit agreement, disbursement record, payment history, completion certificate, cancellation notice, and contract assignment.

Do not stop payments without understanding the risk. Tell the lender’s dispute department that the financed work was not delivered, was abandoned, or was defective. For a covered financial product, complain through the Consumer Financial Protection Bureau or call 1-855-411-2372.

A HUD-approved housing counselor can help review mortgage pressure, repair financing, foreclosure risk, or a home-secured loan. Call 1-800-569-4287. Counseling is a service, not repair money, and the counselor does not replace a lawyer.

Legal Aid, Small Claims, and Other Court Options

Small claims may help when the claim fits local rules. Limits, fees, service, evidence, deadlines, and appeals differ. Use the official state court directory.

Check the contract for mediation, arbitration, venue, attorney-fee, and notice clauses. Get state-specific advice before assuming a clause is valid or invalid.

Legal help is especially important when:

• The loss is larger than the local small-claims limit
• A lien, foreclosure, loan, deed, bankruptcy, or title issue is involved
• The contractor filed a lawsuit or arbitration case
• The contractor is insolvent, dissolved, or in bankruptcy
• Several homeowners may have been harmed
• You need an injunction, contract cancellation, or emergency court order
• A statute of limitation or bond deadline may be near

Use the Legal Services Corporation finder to locate civil legal aid. Eligibility and case acceptance depend on income, location, legal issue, staff capacity, and priorities. A court judgment also does not guarantee collection; the contractor must have reachable wages, accounts, property, insurance, bond coverage, or other assets.

When to Make a Police or Cyber-Fraud Report

Poor work or delay is not automatically a crime. Possible fraud signs include a false identity or license, forged papers, fake permits, repeated victims, diverted loan money, identity theft, threats, or immediate disappearance after payment.

Report immediate danger, threats, trespass, theft, or suspected local fraud to police or the sheriff. When the scheme used email, a website, social media, electronic communication, or online payment, file a report with the FBI’s Internet Crime Complaint Center. Preserve usernames, email headers, phone numbers, wallet addresses, transaction IDs, and website screenshots.

Older adults and adults with disabilities:

Financial exploitation can be reported to local Adult Protective Services. The U.S. Department of Justice lists the National Elder Fraud Hotline at 1-833-372-8311, Monday through Friday, 10 a.m. to 6 p.m. Eastern Time. The hotline offers case managers and referrals; it does not guarantee recovery.

The Eldercare Locator can connect an older adult or caregiver to the Area Agency on Aging, protective services, legal help, and local support. Call or text 1-800-677-1116.

If the Repair Is Still Urgent and the Money Is Gone

A repair program usually will not reimburse a stolen deposit or judgment. It may help with eligible future work after its own inspection. Disclose the failed contract and other assistance.

Help may be a grant, loan, deferred or forgivable loan, service, disaster benefit, volunteer repair, or referral. Rules and funding vary, and work started before approval may be ineligible.

1. Call 211 and ask for owner-occupied emergency repair, housing rehabilitation, weatherization, aging, disability, and nonprofit repair programs for the ZIP code.
2. Call the city or county housing office and ask whether an inspector can document the unfinished safety problem.
3. For a rural home, ask USDA Rural Development about Section 504 eligibility.
4. For an older or disabled household, contact the Area Agency on Aging or local disability organization.
5. Give the program the original contract, payment record, complaint report, photos, and a new independent estimate.

Start with our national guide to home repair assistance or the step-by-step guide on where to start locally. Before sharing documents with a new company, use the program verification checklist.

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