Nov. 10, 2010 -- Today the city of New York is announcing the results of an undercover sting operation that targeted illegal contractors.
The majority of states require home improvement contractors to be properly licensed, but there are still plenty of rogue companies operating.
Repairing or remodeling your home is one of the most expensive projects you'll ever undertake, and when things go wrong it can be not just a money issue but a safety issue.
Click HERE for tips for hiring a contractor, plus see a sample contract.
That's why authorities in New York and elsewhere are getting tough with illegal, unlicensed contractors.
Authorities in New York used an ordinary house that appeared to be in need of repairs to perform a sting. The homeowners who invited contractors to the house were actually inspectors with the New York City Department of Consumer Affairs.
Inspectors Use 'Sting' House to Nab Unlicensed Contractors
As soon as someone offers to perform contracting work, they have him.
"What is it you do?" an inspector asks a contractor.
"Everything," the contractor replies.
"I need brickpointing," the inspector said.
"I start with the foundation. I'm the contractor," the contractor said.
But actually, he's not. In New York and at least 41 states, to be a contractor, you must be licensed or registered.
"Some contractors, once we take away their license, go back out there again and try to keep getting some business. So what we decided to do this year was put together a sting house operation," said Jonathan Mintz, Commissioner of the New York City Department of Consumer Affairs.
The sting also targeted companies that brazenly advertise their services despite being unlicensed. One ad read: "fully licensed and insured," and bragged about the company's "integrity." All lies, according to inspectors.
"Do you guys have insurance and the licenses and all that? Are you licensed?" an inspector asked a contractor.
"We give you an insurance certificate," the contractor replied.
Notice, he doesn't answer the license question.
Inspectors Issue Fines, Impound Vehicles
A proper license is more than just a piece of paper. In New York and many other jurisdictions, if a licensed contractor does you wrong, the government will pay you back out of a special trust fund.
"The license is really the safety net for people when they're using those contractors and that's why we take enforcement of this issue so seriously," Mintz said.
Back at the sting house, inspectors eventually nab a dozen companies and issue $65,000 in fines.
"We're inspectors - think you know that by now," an inspector said.
Even more powerful, they impound their vehicles.
"Once we've got their vehicle, we've got their attention," Mintz said.
Because you can't do any deals if you don't have wheels.
The sting would have netted a 13th illegal contractor, but when inspectors identified themselves, he fled – literally took off.
Here are three steps for having a good experience with a legitimate contractor:
Ask for the contractor's license number and then contact your local government to make sure it's valid. It should be an actual contractor's license – not just a business license.
Check the contractor's reputation by searching your state or county consumer affairs office and the local Better Business Bureau.
Pay as little as possible up front – no more than 25 percent if possible – and don't release the final payment until you are totally satisfied.