TN Attorney General and TDCI Commissioner Share Tips to Help Consumers Avoid Home Improvement Fraud

NASHVILLE—With the first day of spring around the corner, many Tennesseans will be turning their attention to home renovation and improvement projects. Unfortunately, scammers may be gearing up to take advantage of those well-intentioned 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 & Insurance’s (TDCI) Regulatory Boards Division, want to equip consumers with the tools needed to recognize and avoid fraudulent, fly-by-night contractors.

"Home improvement scams top the list of consumer complaints received by our Division of Consumer Affairs,” said Tennessee Attorney General 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’ mission is to protect the public’s health, safety, and welfare through the regulation of contractors, home improvement contractors, limited licensed electricians, and limited licensed plumbers. In 2024, the Board received a total of 884 complaints 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.”

While neighborhood Facebook pages and platforms such as Nextdoor and Angi may be helpful avenues to gather options and recommendations, consumers should still conduct thorough research as scammers may also be lurking on these and similar sites.

Before selecting a professional, consumers should remember the following tips:

• 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, visit Verify.tn.gov, a 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 emailing contractors.home-improvement@tn.gov. The Division of Consumer Affairs can also provide complaint history for companies via email at consumer.affairs@ag.tn.gov.
• Get several bids and check references.
• Look up reviews and complaints for the business on independent platforms such as the Better Business Bureau's website. 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.
• To see even more tips on hiring contractors, visit the Board’s website.

Keep an eye out for these red flags:

• Door-to-door sales: Be wary of contractors selling repairs door-to-door, especially when they offer deep 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 of more than 1/3 of the total contract. Don’t pay more than one-third down and do not 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. 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: Contractors that don’t offer written estimates or don’t provide a contract should be avoided. Contracts should include details such as the start and completion dates, payment terms, installation costs allowances, materials, labor, change orders, and warranty information. Consumers should 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, visit the Board’s website.

To file a complaint with the Division of Consumer Affairs about deceptive business practices, visit www.tn.gov/consumer.

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