Start with a written record and give the contractor a clear opportunity to fix the problem or refund money. If that fails, report the right issue to the right place: a state licensing agency for licensing violations, a local building department for permit or safety problems, and an attorney general for deceptive business practices. A payment dispute, bond claim, mediation, or lawsuit may be needed to recover money.

A Better Business Bureau complaint can encourage a response, but it isn't a government enforcement action. An FTC report can help document a scam or pattern of fraud, but it usually isn't a substitute for a private claim. Because contractor licensing, court limits, filing deadlines, and remedies vary by state and sometimes by city, confirm the rules where the property is located.

The seven steps to take

1. Protect the property and preserve evidence. Address urgent safety risks without destroying proof of the original condition.
2. Review the contract and identify the business. Find the legal business name, license number, payment terms, warranty, and dispute provisions.
3. Create a loss calculation. Separate amounts paid, incomplete work, repair costs, damaged property, and any amount still disputed.
4. Send a written demand. State the facts, the remedy you want, and a reasonable response date.
5. Check payment, bond, and insurance options. Contact your card issuer or bank promptly and ask the licensing agency about a bond claim.
6. File complaints with appropriate agencies. Use official licensing, building, attorney general, or fraud-reporting channels.
7. Consider mediation or small claims court. Check deadlines, court limits, venue, service requirements, and whether the contractor can pay a judgment.

Don't wait indefinitely for informal negotiations. A statute of limitations, lien deadline, payment-dispute deadline, or contract notice requirement may continue to run.

What type of contractor problem do you have?

The best complaint route depends on what happened.

The FTC's home improvement scam guidance warns that scams can involve shoddy work, damage, overcharging, or taking money without performing the promised service.

Step 1: Make the property safe and document its condition

If the work presents an immediate danger, keep people away from the area and contact the appropriate emergency or building official. Arrange necessary temporary repairs, but photograph and record the condition first when it's safe to do so.

Create a dated project file containing:

• The signed contract, estimates, invoices, warranties, and change orders
• Before, during, and after photographs or videos
• Receipts, canceled checks, card statements, bank records, and payment-app confirmations
• Emails, texts, voicemail transcripts, and a log of phone calls
• Permit applications, inspection reports, and notices from the building department
• A timeline showing when work started, stopped, or missed milestones
• A written report or estimate from an independent, qualified contractor or inspector
• Names and contact details for witnesses

Keep the original files and make backups. Don't edit photographs, remove defective work, or throw away materials before an expert or agency has had a chance to inspect them, unless leaving them in place creates a safety risk.

Step 2: Review the contract and verify the contractor

Read the sections covering:

• The exact scope of work and materials
• Completion dates and delays
• Change-order approval
• Payment stages and the final payment
• Cleanup, warranty, and repair obligations
• Cancellation, mediation, or arbitration
• Notice requirements and attorney fees
• Mechanic's lien warnings or releases

Confirm who actually contracted with you. A salesperson's name, a trade name, and the legal business entity may be different. Use the name and address on the contract, invoice, license record, or state business registration when preparing a demand or court filing.

Check the contractor's license with the official state or local agency. A license lookup can help confirm whether the contractor is licensed, whether the license is active, and whether a bond or disciplinary record is listed. It doesn't prove that the work was performed properly.

Unlicensed status also doesn't automatically mean that a contract is void or that you'll receive a refund. Those consequences depend on state and local law. Report suspected unlicensed activity to the agency that regulates the trade where the work occurred.

Step 3: Send a clear demand letter

Many disputes are resolved after the homeowner explains the problem in writing. Follow phone conversations with a letter sent by certified mail, and keep the mailing receipt and a copy of everything sent. Email a copy as well if you have a working address.

A useful demand letter should:

1. Identify the contract, property, and project.
2. State the dates, amounts paid, and work completed.
3. Describe each problem factually.
4. Refer to the relevant contract term, inspection report, or estimate.
5. State the remedy you want, such as completion, correction, payment for repairs, or a refund.
6. Give a clear response date.
7. Explain the next steps you may take if the contractor doesn't respond.

Set a reasonable deadline unless your contract or state law specifies another one. Don't exaggerate the damage or threaten criminal charges over what may be a contract dispute.

Sample contractor demand letter

[Your name]
[Your address]
[Email and phone number]
[Date]

[Contractor's legal name]
[Business address]

Re: Demand concerning [project and property address]

Dear [contractor name]:

On [date], we signed an agreement for [brief project description] at [address]. I've paid [$ amount]. The contract required [relevant obligation or completion date].

The current problems are: [list incomplete work, defects, damage, or missed obligations]. I notified you on [dates and method], but [briefly describe the response or lack of response]. The attached photographs, payment records, and [inspection report or repair estimate] support this request.

I'm requesting [specific remedy and dollar amount, if applicable]. Please confirm in writing by [date] how you'll resolve this matter. If the issue isn't resolved, I may submit the records to the appropriate licensing or consumer protection agencies, pursue a bond or payment claim, request mediation, or file a court action.

Sincerely,
[Your name]

For poor workmanship, identify the specific defects and attach a repair estimate. For a vanished contractor, state the deposit amount, the promised start date, the attempts you made to contact the business, and the refund you want.

If the contractor offers to return, put the repair scope, materials, schedule, permits, inspection plan, and warranty in writing. Don't sign a completion certificate or release until you understand what rights you're giving up.

Step 4: Check payment, financing, bonds, and insurance

The payment method affects what you can do next.

• Credit card: Contact the card issuer promptly and ask how to open a billing dispute for the service. Provide the contract, demand letter, photographs, and repair estimate. The issuer's process and deadlines are separate from a licensing complaint, and a dispute doesn't guarantee a full reversal.
• Debit card, ACH, wire, cash, or payment app: Contact the bank or provider immediately and ask whether any recall, fraud report, or dispute process is available. Recovery options may be limited, especially after a transfer has been completed.
• Unauthorized charge: Describe it accurately as unauthorized if you didn't approve the transaction. If you approved a deposit but the contractor failed to perform, explain that it's a service-performance dispute rather than calling it an unauthorized charge.
• Final payment: The FTC advises consumers not to make the final payment until the work is done and they're satisfied. Compare that guidance with your contract, document unresolved defects, and don't release disputed funds simply because the contractor is demanding payment.
• License bond: Ask the licensing agency whether the contractor had a bond and how to file a claim. A bond isn't the same as insurance or a guaranteed refund. Claim limits, notice rules, exclusions, and filing deadlines vary.
• Insurance: If the work caused sudden property damage, contact your homeowners insurer and ask about coverage. Request the contractor's liability insurance information if available, but don't assume insurance covers defective workmanship or a simple contract breach.
• Contractor-arranged financing: Read the lender's documents separately from the construction contract. The FTC's guidance on home improvement scams warns that a contractor may arrange financing that creates a loan secured by your home. Contact the lender quickly about cancellation or dispute rights, and don't stop loan payments without understanding the consequences.

The FTC's Cooling-Off Rule guidance can provide a three-business-day cancellation period for certain sales made at a home or temporary location. It has exceptions, including some emergency transactions and sales made at the seller's permanent business location. It isn't a universal right to cancel every remodeling contract. If the rule applies, follow the seller's cancellation instructions and send the notice by the required deadline, preferably with proof of delivery.

Step 5: File the complaint with the right organization

A complaint should be short, chronological, and supported by documents. Explain what happened, what you paid, what you requested from the contractor, and what outcome you want. Upload only the information the agency requests, and remove unnecessary Social Security numbers, bank account numbers, and other sensitive data.

State licensing or contractor board

Use the official agency for the state or locality where the project took place. Attach the contract, license information, payment proof, photographs, inspection documents, demand letter, and the contractor's response.

For example, the California Contractors State License Board complaint process describes the information and documentation it may request and explains possible enforcement steps. California's process doesn't establish the procedure in another state.

There's no single nationwide home improvement board. Some states license general contractors statewide, while other states leave residential licensing or particular trades to counties, cities, or separate agencies. Official starting points include Florida's Department of Business and Professional Regulation, the New York Department of State, and the Texas Department of Licensing and Regulation. Confirm that the agency regulates your contractor's trade before filing.

Ask the agency:

• Whether it accepts complaints against this type of contractor
• Whether an unlicensed contractor is handled by a different office
• Whether it offers mediation or arbitration
• Whether a license bond claim is available
• Whether you must file a separate civil case to recover money
• Whether there's a deadline or required notice

Attorney general and consumer protection office

An attorney general's consumer office may accept complaints about deceptive sales, false advertising, pressure tactics, or a business that appears to target multiple consumers. Some offices also offer informal mediation.

Follow the office's instructions rather than sending a large unorganized file. For examples of how state offices structure complaints, see the Georgia Attorney General's filing guidance and the Kentucky Attorney General's consumer complaint guidance. These state procedures aren't automatically applicable elsewhere.

BBB and FTC reports

You can file with the Better Business Bureau if you want to invite a business response. The BBB isn't a licensing authority, can't order repairs, and doesn't issue a court judgment.

Report suspected fraud through ReportFraud.ftc.gov. Include the contractor's names, phone numbers, websites, addresses, payment details, and a concise description of the conduct. The FTC is most useful for documenting scams and patterns; don't rely on an FTC report as your only attempt to recover a deposit.

If the contractor used a false identity, stole property, forged documents, or made threats, you can also contact local law enforcement. Police may treat a workmanship or payment disagreement as a civil matter, so preserve the contract and pursue the civil and administrative routes as well.

Step 6: Try mediation when it fits

Mediation can be useful when both sides still communicate and the disagreement concerns the scope of repairs, the amount owed, or the quality of work. Check the contract and ask the licensing agency or local court about available programs.

A written settlement should specify:

• The total payment or repair obligation
• Who will perform and pay for corrective work
• Dates and access arrangements
• Permit and inspection responsibilities
• What happens if a deadline is missed
• Whether either party is releasing further claims

Don't accept a partial payment in exchange for a broad release unless you understand that it may end your ability to pursue the remaining loss.

Step 7: Consider small claims court

Small claims court may be appropriate when the amount is within your state's limit and you can prove a specific financial loss. It's not always the cheapest or fastest option, especially if the contractor has closed, has no assets, or has filed a counterclaim.

Before filing:

1. Check the court's monetary limit, filing fee, venue rules, and service requirements.
2. Confirm the contractor's correct legal name and address.
3. Check the statute of limitations and any required demand or notice.
4. Review the contract for arbitration, mediation, or attorney-notice provisions.
5. Calculate damages supported by receipts, paid invoices, repair estimates, and inspection reports.
6. Organize the timeline so a judge can understand it quickly.
7. Plan how you'd collect if you win.

Use the official court website for forms and instructions. The California small claims court guidance uses an unfinished bathroom remodel as an example, but California's limits and procedures don't apply nationally.

A judgment isn't the same as receiving cash. Collection can require additional procedures, and a contractor with no reachable assets may be difficult to collect from. If the claim involves serious structural damage, personal injury, a mechanic's lien, contractor financing, an arbitration clause, or an amount above the small claims limit, consider speaking with a local attorney or legal aid service before filing.

Common mistakes to avoid

• Relying only on phone calls or verbal promises
• Filing with a national organization when a local licensing office controls the issue
• Assuming a complaint automatically produces a refund
• Treating a BBB response as a legal finding
• Assuming every home improvement contract has a three-day cancellation period
• Paying the final installment before documenting unfinished or defective work
• Hiring a replacement contractor before preserving evidence
• Using the contractor's nickname or trade name instead of the correct legal defendant
• Ignoring a mechanic's lien notice or a court-service deadline
• Posting private financial information or unsupported accusations online
• Signing a release before confirming that repairs and payments are complete

Frequently asked questions

Can I report a contractor who is unlicensed?

Usually, you can report suspected unlicensed activity to the state or local agency that regulates the trade. The agency's authority and available remedies vary. An unlicensed contractor isn't automatically required to refund every payment, so preserve your separate contract and damages claim.

What should I do if the contractor took my deposit and disappeared?

Save proof of payment, document the missed start date and contact attempts, and send a written refund demand. Contact the payment provider immediately, check the contractor's license and bond status, and file with the appropriate licensing or consumer protection agency. If the contractor still doesn't respond, evaluate mediation or court before a legal deadline expires.

Can the BBB force a contractor to refund me?

No. The BBB can request a response and publish information under its own procedures, but it generally can't compel payment, order repairs, or issue a judgment.

Does the FTC give me a refund?

An FTC report can help regulators identify fraud patterns, but it generally doesn't act as your private collection case. Use it alongside a payment dispute, bond claim, agency complaint, or court action when appropriate.

Is there always a three-day right to cancel a remodeling contract?

No. The federal Cooling-Off Rule covers certain transactions and has exceptions. Read the FTC cancellation guidance, your contract, and applicable state rules before relying on it.

Contractor licensing, consumer-protection laws, court procedures, insurance coverage, and filing deadlines vary by jurisdiction. This is general consumer information, not legal advice. Start by placing the contract, payment records, photographs, repair estimate, and demand letter in one folder, then check the official agency and court deadlines for the property's location.