Spot Home Improvement Scams and Protect Your Finances
The Bottom Line
Home improvement scams can happen at any stage of a project, but knowing the warning signs can help you avoid them. Learn what to watch for before you hire or pay a contractor, and what steps to take if you think you’ve been targeted.
How to Spot a Scam Ad
Many home improvement scams start with an ad on Facebook, Instagram or elsewhere online, including ads promoting homeowner grants, senior relief programs or contractor services. Knowing what to watch for can help you spot a questionable offer before you waste time or money.
These examples are fictional, but the warning signs they illustrate are based on patterns commonly seen in deceptive ads. The images use licensed stock photography with fictional names, brands, domains and ad copy. Use the annotations to learn what to watch for when you come across similar home improvement offers online.
How to Spot Homeowner Grant and Senior Relief Scams
Homeowner program scams are common. They often promise thousands of dollars in free government money for home repairs, but many of these programs are fake, and where a real assistance program does exist it does not work the way these ads describe. The goal is to steal money or your identity.
How Scammers Usually Contact Homeowners
| How they contact you | What it sounds like |
|---|---|
| Social media ads (Facebook, Instagram) | Paid ads using copy like “$15,000 in FREE Government MONEY for you!” or “Seniors: Claim Your Home Repair Benefit Before It Expires.” Some use deepfake videos of politicians or celebrities to appear credible. |
| Postcards and direct mail | Official-looking mailers with seals, government-style fonts, and urgent deadlines. Often include a “claim number” to make you feel pre-selected. |
| Robocalls and text messages | Automated calls claiming you’ve qualified for a government assistance program and asking you to “press 1” to speak with an agent. |
| Social media direct messages | Often come from cloned profiles that look like friends or family. The message claims the sender just received a large grant and wants to share how. |
Three Common Money Theft Models
Model 1: The Processing Fee
Most common. After “qualifying,” you’re told to pay a $150–$2,000 fee to receive your grant. Payment is demanded via gift card, wire transfer, Cash App, or crypto. You pay. The grant never arrives.
Model 2: The Subscription Trap
A small $1.99 charge unlocks a “grant database.” It automatically converts to a $72–$95/month subscription. Most victims don’t notice for months. (FTC v. In Deep Services / Grant$ For You Now.)
Model 3: Book-to-Coaching Funnel
A $59 “grant writing guide” escalates into hundreds more in coaching and seminars, with no grants ever delivered. (FTC v. Grant Writers Institute.)
Theft Model Examples
Identity Theft Model
Many of these scams collect far more than your money. When you “apply,” the form asks for your Social Security Number, bank account number, and date of birth. In a 2025 DOJ case, criminal operators were selling lists containing the personal data of over 7 million elderly Americans (collected through fake applications) to other fraud operations for $10,000 or more per list. (U.S. v. Murray, DOJ June 2025.)
How to Verify Before Sending Data or Money
Real government programs rarely contact you unsolicited (by phone, text, email, social media, or mail), so treat an offer you didn’t seek out as suspect until you’ve verified it.
- Go directly to grants.gov or benefits.gov, never through a link in an ad
- Call 211 (free, nationwide) to be routed to legitimate local assistance programs
- Look up the agency’s official number on their .gov website, not the number in the ad
Red Flags To Watch For
What To Do If You Are Targeted
How to Spot Contractor Fraud
In a contractor fraud scam the contractor often does do the work, but it can be seriously overpriced, poorly executed, or covered by a fraudulent insurance claim, so the homeowner loses money either way. These are especially common immediately after storms, when homeowners are under pressure and insurers are overwhelmed.
1. Storm Chaser Scam
Storm-chaser scams are a common contractor fraud issue. They play on homeowners’ worries and insurance companies that are backed up with claims. Usually these begin within hours of a major hail or wind event.
Here’s what this scam often looks like:
2. Leftover Materials Scam
In this scam, a contractor claims they just finished a job and have leftover shingles or siding they can offer at a discount. That job doesn’t exist. The manufactured urgency (“we have to return the materials today”) prevents you from comparing prices or checking credentials. The pressure to accept such a great deal can feel overwhelming.
3. Fake Inspection Scam
In this scam, contractors show you photos of a different property’s damage, claiming it is your roof. In some cases, they plant shingles on the ground before knocking, then point to them as “evidence” your roof is failing.
It’s important to ask questions when this happens, like:
- When did you take these photos?
- Can you show me exactly where on my property this damage is located?
Digging deeper can help you spot a scam. Read about how to get a legitimate roof inspection.
Red Flags To Watch For
What To Do If You Are Targeted
Where to Report Fraud and Scams
How to Find a Legitimate Contractor
Scams may be common, but there are also many reputable, trustworthy contractors. Here is how they do business.
- They have a state contractor license — look it up on your state’s licensing board to verify it rather than taking their word for it.
- They provide proof of insurance — a certificate of general liability and workers’ compensation cover, before starting work.
- They use a written contract with a detailed scope of work, timeline, materials list and payment schedule, negotiated and signed before any work begins.
- They require a reasonable deposit — typically 10–25% of the project cost. Be wary of requests for 50% or more upfront, or the full amount before work starts.
- They give you time to review the estimate and get several quotes. Same-day pressure is often a major red flag.
- They have verifiable reviews on Google, the BBB or Houzz from customers in your area, not just a Facebook page created last month.
- They pull their own permits when required, and welcome inspections.
Before hiring, always verify a contractor's license and insurance yourself. Don't rely on anyone else's word for it. See our full contractor red flags checklist ›
Remy is an AI assistant. By using Remy, you agree to our Terms and Privacy Policy. Chats may be recorded or monitored.
Frequently Asked Questions
No. The U.S. government does not give unsolicited grants to homeowners for general home improvement. If you receive an unsolicited offer claiming otherwise, treat it as a likely scam and verify it. Legitimate assistance programs require a formal application, have strict income limits, and are administered by known federal agencies. They rarely contact you unsolicited.
Probably not. Ads promising free roof replacement are a common scam tactic. A contractor may be able to file a legitimate insurance claim if your roof sustained documented storm damage, but any program claiming to give you a free roof through a Facebook ad or unsolicited contact is designed to steal money or personal information.
In most states, no. Waiving a policyholder’s deductible is considered insurance fraud in many jurisdictions. States including Florida, Texas, and Colorado have passed specific laws prohibiting this practice. If a contractor offers to waive your deductible or “cover it with extra work,” that is a major red flag and potentially illegal for both parties.
An Assignment of Benefits (AOB) is a document that transfers your insurance claim rights to the contractor. Once signed, they control all communications with your insurer and receive payment directly. This can make it very difficult to dispute inflated claims or change contractors mid-project. Legitimate contractors rarely require an AOB before starting work. Do not sign one under pressure. Always consult your insurance company first.
Your state probably has an official contractor license lookup page. Search for ‘[state] contractor license lookup’ to get started. Be aware that not every state licenses every trade.
Using a contractor license lookup, you can typically verify the license number, check if it is current, and see any disciplinary actions. Also, ask the contractor for their license number before work begins. A legitimate contractor will provide it without hesitation.
Storm chaser fraud (out-of-state contractors who follow weather events and use pressure tactics to get quick signatures) is among the most reported. Upfront payment fraud (taking a deposit and disappearing) and bait-and-switch materials are also common.
File complaints with your state contractor licensing board, the FTC at ReportFraud.ftc.gov, your state attorney general’s consumer protection office, and the BBB. For significant amounts, consult a construction attorney about bond claims or civil suit.
Deposits are legal and common. What is not acceptable is demanding 50% or more before work begins, or asking for full payment upfront. A reasonable deposit is 10-15% of the project total, with payment milestones tied to project completion.
A contractor bond (also called a surety bond) is a three-party agreement that protects you if the contractor fails to complete the work or causes damage. If a licensed, bonded contractor defrauds you, you can file a claim against their bond.
Match with Trusted Contractors
Tell us about your project and we will match you with contractors in your area, ranked by feedback from real homeowners.