To report a bad contractor and get your money back, file complaints with your state contractor licensing board and your state attorney general’s consumer protection division, and pursue the money itself through a credit card chargeback, a claim on the contractor’s surety bond, your state’s contractor recovery fund, or a lawsuit in small claims or civil court. Complaints and recovery run on separate tracks, and you usually want both moving at once. The order you take these steps affects what you can collect, so it pays to work through them deliberately.
Put Your Evidence Together Before You Do Anything Else
Nothing that follows works without documentation. Pull everything related to the job into one place and organize it by date.
Start with the written contract. That document pins down the scope of work, materials, timeline, and price, and every complaint or claim you file later gets measured against what it says. If your agreement was verbal, write down what you remember about the terms while the details are fresh.
Save every email, text, and voicemail. Print digital conversations to PDF so they survive a lost phone or an app update. For phone calls, keep a log with dates, who you spoke with, and what was said. Gather canceled checks, bank statements, credit card receipts, wire confirmations, and any invoices marked paid. If you paid any cash, note the amount and date immediately.
Photograph the incomplete or defective work from multiple angles in good light, and take video where movement helps show the problem. Capture debris, exposed wiring, unfinished framing, anything left behind. If problems are still developing, keep photographing the same areas over time.
One step most homeowners skip: hire an independent licensed contractor or inspector to evaluate the work in writing. A qualified professional’s assessment carries far more weight than your own description, and their estimate of what it will cost to repair or complete the work becomes the number you use to calculate your damages.
Send a Demand Letter First
Before you file a single complaint or head to court, send the contractor a written demand letter. Judges want to see that you made a reasonable effort to resolve the dispute before taking up court time, and this letter is the clearest evidence of that effort.
Keep it professional and factual. Summarize the agreement, describe what went wrong, and state exactly what you want: a specific dollar amount, completion of the remaining work, or both. Show how you calculated the amount. Attach copies (never originals) of your contract, payment records, photos, and the independent assessment.
Set a firm deadline for a response, typically 10 to 14 days. Send the letter by certified mail with return receipt requested, and send a duplicate by regular mail as a backup. If the contractor ignores it or refuses, you now have documented proof of their unwillingness to resolve the issue, and every option that follows becomes stronger.
Where to File Complaints
Complaints do two things: they trigger potential discipline against the contractor, and they create an official paper trail that supports any later legal claim. You are not limited to one agency, and filing with several at once is normal.
State Contractor Licensing Board
Your state’s contractor licensing board is the most direct regulatory authority over licensed contractors. Boards can impose fines, mandatory education, probation, license suspension, or full revocation. Most take complaints through an online portal where you upload your evidence, describe the dispute, and identify the contractor. The board forwards a copy to the contractor for response and may assign an investigator.
Understand what the board will and will not do. It handles administrative discipline. It typically will not order the contractor to pay you back. Restitution comes from bonds, recovery funds, and courts. The board complaint still matters because it creates official records that strengthen those efforts.
State Attorney General
When a contractor’s behavior crosses into fraud, your state Attorney General’s consumer protection division is the right place to report it. A contractor who takes a large deposit and disappears, lies about being licensed, or runs a bait-and-switch on materials is engaging in the kind of conduct AG offices investigate. After reviewing a complaint, the office may mediate the dispute, issue a cease-and-desist order, or pursue legal action against the contractor. Remedies include injunctions, civil penalties, license revocation, and consumer restitution.1National Association of Attorneys General. Consumer Protection 101
AG investigations tend to focus on patterns of misconduct rather than one-off disputes. If your contractor has defrauded multiple homeowners, your complaint could be what triggers a formal investigation. Even if the AG doesn’t take up your individual case, your complaint becomes part of a file that other consumers and investigators can access.
Federal Trade Commission
For contractor scams and deceptive practices, file a report at ReportFraud.ftc.gov.2Federal Trade Commission. ReportFraud.ftc.gov The FTC does not resolve individual complaints or recover your money directly. What it does is feed your report into Consumer Sentinel, a database used by law enforcement nationwide. When reports accumulate against the same contractor or the same scam pattern, that data helps build federal or state enforcement cases.
Local Building Department
If the work violates building codes or creates safety hazards, report it to your city or county building department or code enforcement office. Inspectors can visit the property, document violations, and issue formal notices requiring the property to be brought into compliance. The inspector’s written report becomes powerful evidence in later legal action. This matters especially when the contractor pulled permits for work that doesn’t meet code, because the building department can prevent anyone from closing out those permits until the deficiencies are corrected.
Better Business Bureau
The BBB has no legal enforcement power, but its complaint platform can pressure contractors who care about their public rating.3Better Business Bureau. File a Complaint After you file, the BBB contacts the business and asks for a response.4Better Business Bureau. How BBB Complaints Are Handled The complaint becomes part of the contractor’s public profile. This process works against established businesses that depend on reputation and does very little against fly-by-night operators who have no reputation to protect.
How to Actually Get Your Money Back
Complaints punish. They rarely refund. These are the tools designed to put money back in your pocket, and some are faster than court.
Credit Card Chargeback
If you paid the contractor with a credit card, federal law gives you two protections most homeowners never use. The first is the right to dispute a billing error. Under the Fair Credit Billing Act, charges for goods or services not delivered as agreed qualify as billing errors. Send a written dispute to your card issuer within 60 days of the statement that included the charge, identifying the transaction and explaining what’s wrong.5Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors
The second protection is broader and often more useful. You can assert any claim or defense against your card issuer that you could assert against the contractor, as long as you first made a good-faith attempt to resolve the problem directly. For transactions over $50 that occurred in your home state or within 100 miles of your billing address, the card issuer becomes responsible for the disputed amount up to the outstanding balance on that transaction. The geographic and dollar thresholds don’t apply if the contractor solicited you by mail or if the issuer is affiliated with the contractor’s payment processor.6Office of the Law Revision Counsel. 15 USC 1666i – Assertion of Claims and Defenses
A chargeback can recover thousands of dollars without filing a lawsuit or waiting on a regulator. It’s one of the strongest reasons to pay contractors by credit card in the first place.
Surety Bond Claim
Most states require licensed contractors to carry a surety bond as a condition of licensure. The bond is a financial guarantee: if the contractor fails to perform, you can file a claim against the bond and recover your losses up to the bond amount. Bond amounts vary widely by state and license class, from as low as $1,000 for small residential work to $100,000 or more for larger commercial licenses.
To file, identify the contractor’s bond company. Your state licensing board can usually tell you who it is. Contact the surety, request a claim form, and submit your evidence that the contractor breached the contract. The surety investigates and, if the claim is valid, pays you up to the bond amount. The contractor then has to reimburse the surety, which creates real pressure on them. Bond claims are underused because most homeowners don’t realize the option exists.
State Recovery Fund
Roughly a third of states maintain a contractor recovery fund, financed by fees licensed contractors pay into as part of their licensure. These funds exist specifically to compensate homeowners when a licensed contractor causes financial harm. Typical payout caps range from $20,000 to $75,000 per claim, depending on the state.
Most recovery funds are “last resort,” meaning you generally need a court judgment against the contractor first, plus evidence that you can’t collect on it, before the fund will pay. A few states run “first resort” funds that let you go directly to the fund without suing first. Check with your state licensing board to find out whether a fund exists in your state and what the filing requirements are. These funds have their own filing deadlines, typically two to four years from the date of the contractor’s misconduct or the date you discovered it.
Court When Nothing Else Has Worked
If complaints and recovery tools haven’t resolved things, court is next. First, though, read your contract for a mandatory arbitration clause. Arbitration provisions are common in construction contracts and courts generally enforce them, which means you may be required to take your dispute to a private arbitrator instead of a judge. Some contracts require mediation before arbitration; either way, know which process your contract calls for before you spend time or money on the wrong path.
Small Claims Court
Small claims court is designed for people to handle disputes on their own without a lawyer. The process is simpler, faster, and cheaper than a full civil suit. Jurisdictional limits vary by state, ranging from $2,500 to $25,000 as of 2026. Filing fees typically run between $15 and a few hundred dollars.
The trade-off is the cap and the informal process, which means no extensive discovery. For a contractor who took $8,000 and did half the work, small claims is often the most practical path to a judgment. Bring your contract, payment records, photos, and the independent repair estimate. Judges in small claims cases appreciate organized evidence and a clear explanation of the gap between what you paid for and what you got.
Civil Lawsuit
For disputes above the small claims limit or involving complex issues like structural damage, a civil lawsuit in your county’s trial court gives you access to the full range of remedies. You’ll need an attorney, and the process takes longer and costs more. Courts overwhelmingly award monetary damages in construction disputes rather than ordering the contractor to finish the job, so your suit will typically focus on recovering the cost of a replacement contractor, the cost of repairing defective work, and other financial losses caused by the breach.
Deadlines That Can End Your Case
Every claim has a deadline, and missing it means losing your right to sue no matter how strong your evidence is.
The statute of limitations sets the window for filing suit after a problem arises. For breach of contract, most states allow three to six years, with some extending to ten years for written contracts. Many states give you more time for written contracts than for verbal ones, which is one more reason to get everything in writing.
For construction defects specifically, a separate deadline called a statute of repose may apply. A statute of limitations starts when you discover the defect; a statute of repose starts when the project is substantially completed, regardless of when you find the problem. These outer limits typically run from six to fifteen years depending on the state. Once the repose period expires, you’re barred from suing even if the defect was hidden and you just found it.
Many states use a discovery rule that delays the start of the limitations clock until you knew or should have known about the defect. A roof that leaks the day after the contractor leaves is obvious. A foundation defect that doesn’t reveal itself for three years starts the clock only when the signs appear. Don’t assume you have unlimited time just because the problem showed up recently.
Two Situations That Change Your Options
The Contractor Was Never Licensed
If you discover your contractor was unlicensed, your position may actually be stronger. In many states, unlicensed contractors cannot legally enforce a contract or collect payment for work requiring a license, and some states allow homeowners to recover all money paid to an unlicensed contractor even if the homeowner knew about the lack of licensure at hiring. There’s a flip side: in some jurisdictions, hiring an unlicensed contractor can make you responsible for workers’ safety and potential injuries on the job, because the law may treat you as their employer. Rules vary substantially by state. Verify a contractor’s license through your state licensing board’s online database before any project, and consult an attorney if you’ve already paid an unlicensed one.
The Contractor Came to Your Door
If a contractor solicited you at your home and you signed a contract on the spot for work valued at more than $25, federal law gives you three business days to cancel without penalty. The right comes from the FTC’s Cooling-Off Rule, which applies to sales made at your home or at locations that are not the seller’s permanent place of business.7Federal Trade Commission. Cooling-Off Period for Sales Made at Home or Other Locations The contractor must give you a cancellation form and notice of your right to cancel at the time of sale. If they never did, the cancellation window may not have started running yet. This doesn’t help if you sought out the contractor and signed at their office, but for door-to-door situations, it can be a way out of a bad deal before any work begins.
Watch Out for Mechanic’s Liens
One scenario blindsides homeowners even when they’ve paid in full: your general contractor doesn’t pay a subcontractor or supplier, and that unpaid party files a mechanic’s lien against your property. In many states you can end up paying twice for the same work. The risk grows with larger projects and more subcontractors.
The defense is a lien waiver from the contractor and every subcontractor with each progress payment. A conditional waiver takes effect only after the payment clears; an unconditional waiver takes effect immediately on signing. Request conditional waivers before you pay and unconditional waivers after the payment posts. For larger projects, consider joint checks made out to both the contractor and the subcontractor or supplier, so the money actually reaches the person doing the work. Filing a notice of completion with your county recorder after the project wraps up shortens the window during which subcontractors can file liens. Lien rules vary significantly by state, and for substantial sums a brief consultation with a construction attorney is worth the cost.