Contractor was paid but never did work

I paid a contractor a $3,900 up-front deposit for a $5,400 contract for work on my home. He never began the work and is ignoring my phone calls. Can I get my money back? Consumer Ed says: There are some actions you can take to try to get your money back.

At the outset, make sure to gather any documents you have involving your interaction with the contractor, such as your written contract, deposit receipt, and any recorded attempts to contact him. Closely review your contract (along with any guarantees or warranties), which should outline all terms of the agreement, including the start and end dates, payment and refund schedules, and other pertinent provisions. If there are any provisions addressing contractor performance issues such as contractor no-show, follow the procedures for redress (i.e. remedying the situation through compensation or other means), outlined in those provisions. If your contract lacks these provisions, or if you made a verbal agreement instead, there are still other steps you can take to get your money back.

In addition, if you paid with a credit card, contact your credit card provider to try to dispute the charge, letting them know this was a transaction you willingly made but that the service was not rendered. Just be aware that the time period for disputing a charge with a credit card provider is typically 60 days from the date a charge appears on your credit card statement.

Second, if the contractor fails to respond to any of your informal attempts at contact, you can send him a formal letter detailing your demands. We recommend sending the letter as certified mail through the postal service so that you can receive a receipt confirming the letter was sent, along with verification that the letter was delivered or that a delivery attempt was made. In the letter, you can mention that if you don’t hear from him or get your deposit refunded within a certain timeframe (such as two weeks after receipt of the letter), you will pursue other courses of action. Other courses of action that may be available to you include:

Filing a complaint with the Better Business Bureau (BBB). The BBB also offers several low-cost dispute resolution methods such as arbitration that may help you settle the issue without having to go to court.

Reporting the contractor to Georgia’s state licensing board or his local licensing board (or to the proper authority if he is operating without the required state or local licenses). You can check with your local building inspection department to see what the licensing requirements are in your area, and you can verify that your contractor has a valid license by going to the License Verification section of the Secretary of State’s website.

Filing a lawsuit. If dispute resolution is not feasible, you may file a lawsuit through a magistrate court, commonly referred to as “small claims court” since it handles minor claims of less than $15,000. Although you may file a claim in a magistrate court in your own name without an attorney, we still recommend you consult a private attorney to determine the extent of legal options available to you. To find a lawyer in your area, contact your local bar association. A list of the bar associations in Georgia can be found on the State Bar of Georgia’s website: gabar.org.

Contacting the Consumer Protection Division. You can also submit a complaint to the Georgia Department of Law’s Consumer Protection Division at consumer. ga.gov or by calling 404651-8600, or to the Federal Trade Commission (FTC) at ftc.gov.

Contacting Local Law Enforcement. If you believe that the contractor took your money and has no plans to return to do the work, you may want to report it to local law enforcement.

For future reference, make sure to only pay your contractor a reasonable deposit—typically 10 percent, but no more than 25 percent, of the total contract price cost— and have written provisions in your contact entitling you to a refund of your deposit if the contractor does not show.

Submit your own question to Consumer Ed at consumered.georgia.gov and remember… this is not legal advice. Always consult a lawyer about legal issues.

Consumer Ed was developed by the Georgia Department of Law’s Consumer Protection Division to educate consumers and help them make informed decisions when it comes to buying a car or home, dealing with credit and debt, making home repairs and improvements, managing money, and avoiding identity theft and scams. The information contained in the pages of this website will help you avoid common pitfalls and walk you through major purchase decisions so that you don’t get overwhelmed or make a decision that may not be in your best interest.