State officials give tips to help Tennesseans avoid home improvement fraud & bad contractors | Local News

State officials are offering tips to help Tennesseans, who will be doing home renovations and improvements this spring, avoid being scammed by fraudulent contractors.

The Tennessee Attorney General’s Office Division of Consumer Affairs and the Tennessee Board for Licensing Contractors, a section of the Tennessee Department of Commerce & Insurance’s (TDCI) Regulatory Boards Division, want to equip consumers with the tools they need to recognize and avoid fly-by-night contractors.

State officials say while neighborhood social media pages and other online platforms may be helpful ways to find options and recommendations, consumers should still do thorough research as scammers could also be lurking on these sites.

What to know before hiring a professional contractor:

• In Tennessee, a contractor’s license is required before bidding or price negotiations when the total cost of the project is $25,000 or more.
• For work of less than $25,000, consumers should check with their local government’s building codes office to confirm whether a contractor needs a state license or local license to perform home improvement, electrical, plumbing or HVAC work, as well as their permit requirements for inspections. TDCI’s website includes information on who needs a home improvement license, a limited licensed plumber license, and a limited licensed electrician’s license.
• Before hiring a contractor, use Tennessee’s free online database where you can check the license status of thousands of professionals and businesses.
• For complaint and disciplinary history, contact the Board for Licensing Contractors at (615) 741-8307 or by email. The Division of Consumer Affairs can also provide complaint history for companies via email.
• Get several bids and check references.
• Look up reviews and complaints for the business on independent platforms such as the Better Business Bureau. The more platforms you check, the better.
• Check the Tennessee Secretary of State’s business search website to see if they are organized in Tennessee, or if they have a Certificate of Authority to operate in Tennessee if they are organized in another state.
• Check with your county clerk’s office to confirm that the contractor has the appropriate local business license to operate. A business license is separate from a contractor’s license. Construction contractors generally need a county business license if their annual gross receipts exceed $3,000.
• Make sure the contractor is insured to cover workers’ compensation, damage and general liability insurance by requesting copies of the contractor’s insurance certificates showing a current effective date.
• Never pay cash; and do not pay the total amount before the work is complete or turn over your insurance check. (Consider paying with credit cards with special protection.) State law prohibits requiring more than one-third down payment.
• You can find more tips for hiring contractors from the Board for Licensing Contractors online.

Here are some red flags to keep in mind:

The Board for Licensing Contractors’ mission is to protect the public through the regulation of contractors, home improvement contractors, limited licensed electricians, and limited licensed plumbers.

In 2024, state officials say the Board received a total of 884 complaints and took disciplinary actions totaling $990,896.25 in civil penalties from 299 of those complaints.

You can also file a complaint online with the Division of Consumer Affairs about deceptive business practices.

Stay with Local 3 News for the latest Scam Alerts in the Tennessee Valley.