A smooth-talking contractor can cost you thousands — here are key ways to help you hire the right handyman

In one instance, Liz Pereira, a single mother in Millbury, Massachusetts, called Landmark Masonry & Construction in January 2024 about a flooded basement. A man named “Mark,” who purported to represent the company, met Pereira at her home and recommended a French drain to keep water outside the house, adding that a cracked foundation needed to be addressed, too.

“He knew I had breast cancer five years ago,” Pereira told NBC Connecticut. “He said that his mom had passed away from cancer as well. I felt like we connected. And I really felt like he cared about me.”

Feeling good about the connection, Pereira hired Landmark to fix the problem, signing a contract valued at about $20,000. Later, when Mark told Pereira the work was complete, she noticed something was off.

“They finished and ... I had water in the basement the next day,” she said.

Even worse, the construction job was so poor that Pereira noticed her home’s foundation was sinking. She called the police, who, after a brief investigation, turned the case over to the local district attorney’s office, which determined it was a civil matter and declined to press charges.

“I was pretty devastated ... It’s really unfair to hard-working people,” Pereira said. “I felt defeated.”

These signs indicate you’re about to be scammed

The odds of Homeowners like Pereira being scammed by fraudulent contractors are rising, as reported instances of contractor fraud increased 38% from 2023 to 2025, according to the National Insurance Crime Bureau.

To avoid home contractor fraud, industry experts advise keeping a sharp eye out for these red flags.

Fast solicitation after extreme weather events

Home repair scammers, often called storm chasers, pressure vulnerable homeowners into immediate repairs.

“That results in low-quality or unfinished work,” Courtney Klosterman, home insights expert at Hippo Insurance, told Moneywise.

Contracts offering free inspections

Often, a contractor offers a free home inspection, usually claiming to have noticed an issue from the street.

“These scammers might invent or exaggerate problems to pressure homeowners into unnecessary or overpriced repairs,” Klosterman said.

Snowballing home improvement projects

This home contractor scam starts with a seemingly small, legitimate repair, but the contractor then claims to find more problems that increase the project scope and cost.

“Soon enough, homeowners can find themselves stuck in a cycle of escalating costs for work,” she said.

Watch out for material markup inflation

Unscrupulous contractors often excessively mark up material costs or use inferior materials while charging homeowners for premium ones and then pocket the difference.

“Homeowners should establish the requirement at contract signing that the contractor must provide line-item receipts for products and materials,” Andy Gibbs, an architectural engineer and founder of RemodX, in Rancho Mirage, California, told Moneywise. “That could be $1,000 for small projects and maybe $5,000 or more for larger projects.”## Leverage these tips before hiring a home contractor

It’s a good idea to do thorough due diligence before signing a contract with home contractors. These due diligence action steps should be part of that vetting process.

Get an actual copy of their contractor’s license

The license will state the contractor’s business name, address, number and issue date.

“Homeowners should then look up the number with the state contractor license board, which will flag any problems, which should take no more than five minutes,” Gibbs said.

Also, get a copy of their business insurance and bond certificate.