Tennessee officials share tips for avoiding home improvement fraud

NASHVILLE, Tenn. (WKRN) — With spring officially underway, plenty of Tennesseans will soon turn their attention to home improvement projects, but there are also scammers who may take advantage of those plans.

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 and Insurance’s (TDCI) Regulatory Boards Division — joined forces to help equip consumers with the tools needed to recognize and avoid fraudulent, fly-by-night contractors.

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“Home improvement scams top the list of consumer complaints received by our Division of Consumer Affairs,” said Tennessee AG Jonathan Skrmetti. “If you’re planning to renovate this spring, make sure your contractor really is licensed and bonded—don’t take their word for it. Do your due diligence before you trust anyone with your money.”

The Board for Licensing Contractors aims to protect the public’s health, safety, and welfare by regulating contractors, home improvement contractors, limited licensed electricians, and limited licensed plumbers. Officials said the board received 884 complaints in 2024 and took disciplinary actions totaling $990,896.25 in civil penalties from 299 of those complaints.

“While the majority of Tennessee’s contractors play by the rules and deliver quality work, there may be some who leave consumers dissatisfied and frustrated,” said TDCI Commissioner Carter Lawrence. “Before hiring a contractor to conduct work on any home improvement project either large or small, I encourage consumers to first learn Tennessee’s rules governing contractors and ask questions to their contractor about their background, training, and insurance coverage. If consumers ever feel that they have been treated unfairly, they should contact our team and file a complaint.”

The AG’s office acknowledged neighborhood Facebook pages and platforms like Nextdoor and Angi may be helpful ways to gather recommendations, but Tennesseans should still thoroughly research their options because scammers may be lurking on such sites.

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Before you pick a professional for any home improvement project, officials urge you to remember the following tips:

A contractor’s license is required in Tennessee before bidding or price negotiations when the project’s total cost is at least $25,000.
Before hiring a contractor, visit Verify.tn.gov. This free online database allows you to check the license status of thousands of professionals and businesses.
Get several bids and check references.
Check with your county clerk’s office to confirm the contractor has the appropriate local business license to operate, keeping in mind that 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 with a current effective date.
Never pay cash. Instead, consider paying with credit cars with special protection. Also, never pay the total amount before the work is complete or turn over your insurance check.

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The AG’s office also shared a list of red flags to watch out for:

Door-to-door sales: Be wary of contractors selling repairs door-to-door, especially if they offer discounts that seem too good to be true.
High-pressure sales tactics: Avoid those who offer services for a short time only, which can make you feel rushed and unable to research them properly.
Demand of full payment upfront: Tennessee’s Home Improvement law prohibits contractors from asking for a down payment more than a third of the total contract, so don’t pay more than a third down and don’t let the payments get ahead of the work.
Reluctance to pull permits: If the contractor asks you to pull your own permits, that’s a warning sign because the person performing the work should obtain the building permits, not the homeowner.
Insistence on cash-only payment: Never pay with cash and never sign over your insurance check.
Refusal to set out terms in writing: Avoid contractors who don’t offer written estimates or don’t provide a contract. Contracts should include details like the start and completion dates, payment terms, installation costs allowances, materials, labor, change orders, and warranty information. You should also make sure to retain a copy of the contract.

To file a licensure violation complaint about a contractor or home improvement company with the Tennessee Board for Licensing Contractors, click here. You can also file a complaint with the Division of Consumer Affairs about deceptive business practices by following this link.

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