Contractor Took Your Deposit and Disappeared? Do These 6 Things Now

If a contractor took your deposit and stopped responding, you're not alone — and you still have options. The FTC puts the median loss in contractor fraud cases at around $2,800. Your immediate steps are: document everything, file a complaint with your state's licensing board, file a police report, and file with your state attorney general. What comes next depends on how much you lost and whether the contractor was licensed and bonded.

What should you do in the first 48 hours after a contractor disappears?

The first 48 hours matter more than most people realize. Your goal is to create an official record before evidence disappears and to preserve every legal option available to you.

Step 1: Document everything you have. Gather and save: your written contract (or any written communication about the agreement), receipts for every payment made, bank or credit card statements showing transactions, every text message and email exchange, photos of any work performed, and photos of the current state of your property. If you paid by check, get copies of the cleared checks. This documentation is the foundation of every other step.

Step 2: Make one formal contact attempt.Send the contractor a written message — text, email, and certified letter to any address you have — stating clearly that you expect them to either resume work or return your deposit within a specific number of days (seven is reasonable). Keep it factual, not emotional. This creates a record that you gave them the opportunity to make it right.

Step 3: File a complaint with your state's licensing board.If the contractor was licensed, your state's licensing board is your most powerful immediate resource. Boards can investigate complaints, mediate disputes, impose fines, and suspend or revoke licenses. California's CSLB, Florida's DBPR, Texas's TDLR, and the equivalent agencies in every other state all have complaint processes. Filing is usually free and can be done online.

Step 4: File a police report.Taking money for services not rendered is fraud. Go to your local police department and file a report. Officers may tell you it's a “civil matter,” but insist on filing the report. A case number creates an official record that other agencies can reference, and it may be required for insurance claims or civil litigation.

Step 5: File with your state attorney general. State AG offices have consumer protection divisions specifically for contractor fraud. Find yours at naag.org. Filing a complaint takes 15 minutes and costs nothing. AGs track complaint patterns and sometimes pursue enforcement actions against serial offenders.

Step 6: Dispute the charge with your credit card company.If you paid any amount by credit card, call your card issuer and initiate a chargeback dispute. Explain that you paid for services not rendered. Credit card dispute rights exist precisely for situations like this, and the process often takes 30–60 days to resolve.

What legal options do you have to recover your money?

Your legal options depend primarily on how much money you lost and whether you can locate the contractor. Here are the main paths:

Small claims courtis the most practical option for most homeowners. Small claims handles disputes without attorneys (or with very limited attorney involvement), the filing fee is typically $30–$100, and most states have limits ranging from $5,000 to $12,500 — though some states go as high as $25,000. If your deposit was under $10,000, small claims is almost always your first move. You will need the contractor's name and address to serve them. If you have a signed contract, serving them is usually straightforward.

Civil lawsuitis appropriate when losses exceed small claims limits, when the contractor can be located, and when they have assets worth pursuing. You'll likely need an attorney, which adds cost. Some construction attorneys work on contingency for contractor fraud cases. For losses over $15,000–$20,000, a consultation with a construction attorney is worth the time.

Mechanic's lien:This one runs in the other direction. If a contractor partially completed work on your property before disappearing, you might think a mechanic's lien is their tool, not yours. But if you can document that you overpaid relative to the work performed, some states allow homeowners to pursue recovery through the contractor's bond — see the next section.

Why does it matter whether the contractor was licensed and bonded?

This is the difference between having a real recovery path and not having one. Licensed contractors in most states are required to carry a surety bond. A surety bond is specifically designed to compensate homeowners when a licensed contractor fails to complete a contract, abandons the job, or causes financial harm. If your contractor was licensed and bonded, you can file a claim against their bond through the bonding company, separate from any legal action you take.

The bond claim process typically involves: contacting the surety company (your state licensing board can tell you which bonding company the contractor used), submitting your documentation of the loss, and following the bonding company's claims process. Bond amounts vary by state — California requires a $25,000 bond for most contractors, Florida requires $10,000 or more — so the bond may not cover your full loss if you were significantly defrauded, but it's often the fastest path to partial recovery.

If the contractor was unlicensed, they almost certainly carried no bond and no general liability insurance. This doesn't mean you have no options, but it means your path to recovery is harder. Small claims court and the police report are still worth pursuing, but your practical odds of collecting are lower.

What deposit amount is a red flag, and how does this happen to people?

The median contractor fraud loss is around $2,800 according to FTC data, and the pattern behind most of those losses is the same: a homeowner paid an oversized deposit before work began, the contractor stopped responding, and the homeowner had no leverage left.

Industry standard for upfront deposits is 10–15% of the total project cost. Any deposit exceeding 30% of the project cost is a major red flag.Some states cap deposits legally: California limits contractor deposits to $1,000 or 10% of the contract price, whichever is less. A contractor who demands 50% upfront — or full payment — before starting work has every financial incentive to disappear.

It's worth understanding how people get into these situations. The contractors who take deposits and disappear are often charming, professional-seeming, and give detailed quotes. They show up on time for the estimate. They have trucks with company logos. They present a contract. The scam works because nothing looks wrong until it's too late. The one check that would have caught most of them — a license verification — is the one step most homeowners skip.

How do you protect yourself from this happening on your next project?

The contractor who disappears with your deposit is almost always unlicensed, has a complaint history somewhere, or is operating under a license that doesn't match their name. These facts are findable before you hire — but only if you look.

• Verify the license before any money changes hands. Not after the estimate. Before the contract is signed.
• Cap your deposit at 15% or less. Never pay more than 30% upfront for any project.
• Pay by credit card. You have chargeback rights. Cash gives you nothing.
• Get a signed, detailed written contract with a milestone-based payment schedule.
• Confirm the contractor is bonded. Ask for proof, or verify through your state licensing board.
• Check for complaint history through your state licensing board and the BBB before signing anything.

CheckLicensed.comhandles the license verification step for you — we check state licensing records, confirm bond and insurance status where available, and flag expired, suspended, or revoked credentials. Run a check before you sign. The $2,800 median fraud loss is a lot more painful than a two-minute lookup.