Online marketplaces and home-repair services can save families time and money, but they also attract scammers.
Before sending money, signing a contract or allowing someone to begin work, take a few minutes to verify who you are dealing with.
Marketplace Warning Signs
Be cautious when a buyer or seller:
- Pressures you to act immediately.
- Refuses to communicate through the marketplace.
- Requests payment by gift card, wire transfer or cryptocurrency.
- Sends a link asking you to “verify” your account.
- Requests a security or verification code sent to your phone.
- Offers to pay more than the asking price.
- Claims you must pay a fee to receive money.
- Uses only stock photographs instead of pictures of the actual item.
Scammers sometimes send fake payment notices that look like messages from a bank or payment app. Check your actual account before releasing an item.
Never refund an alleged overpayment until your bank confirms that the original payment was legitimate. A check may appear in your account before the bank discovers that it is fake.
Use the Marketplace’s Payment System
Keep messages and payments inside the marketplace whenever possible.
Moving the transaction outside the platform may remove buyer or seller protections. Credit cards and protected payment systems generally provide better options for disputing a fraudulent transaction than gift cards, wire transfers or cryptocurrency.
For an in-person exchange, meet during daylight hours in a busy public location. Do not invite an unknown buyer into your home unless the item cannot reasonably be moved.
Contractor Warning Signs
Use extra caution when a contractor:
- Appears at your door without being invited.
- Says the offer is available “today only.”
- Demands full payment before starting.
- Wants payment only in cash.
- Refuses to provide a written estimate.
- Asks you to sign a document with blank spaces.
- Cannot provide a business address or references.
- Promises to waive an insurance deductible.
- Asks you to sign over an insurance check.
- Refuses to show proof of insurance or a required license.
A price far below every other estimate may also indicate missing work, poor materials or an attempt to collect a deposit and disappear.
Check the Contractor Before Signing
Get at least two or three written estimates. Each estimate should describe the work, materials, total price, payment schedule and expected completion date.
Ask for proof of liability insurance and contact the insurance company to confirm that the policy is active.
Texas does not issue one statewide license covering every type of general contractor. However, electricians, air-conditioning contractors and plumbers generally must hold the appropriate trade licenses.
Use the Texas Department of Licensing and Regulation license search to check electricians and air-conditioning contractors.
Plumbing licenses can be checked through the Texas State Board of Plumbing Examiners. Parents and homeowners should also ask their city whether permits or local contractor registration are required.
Protect Your Money
Do not pay the entire cost before the work is complete.
Use a written payment schedule tied to completed stages of the project. Pay by check or credit card when possible so there is a record of each transaction.
Do not sign a completion certificate until the work is finished, the property is cleaned and you have inspected the results.
Keep copies of estimates, contracts, receipts, messages, photographs and payment records.
What to Do After a Scam
Contact your bank, credit-card company or payment service immediately. Ask whether the payment can be stopped, disputed or reversed.
Report the seller or buyer through the marketplace. Save screenshots before the profile, listing or messages disappear.
Contact local law enforcement when money or property has been stolen. Call 911 when someone is threatening you or there is an immediate danger.
Official Complaint Resources
Report deceptive businesses and contractor problems through the Texas Attorney General’s Consumer Complaint Form. Consumer assistance is also available at 800-621-0508.
Report marketplace fraud and other scams to the Federal Trade Commission.
Online fraud involving fake profiles, electronic payments or internet communications can also be reported to the FBI Internet Crime Complaint Center.
Complaints involving licensed electricians or air-conditioning contractors may be submitted to the Texas Department of Licensing and Regulation or reported by calling 800-803-9202.
Plumbing-license complaints can be directed to the Texas State Board of Plumbing Examiners at 512-936-5200.
The safest response to pressure is to stop. A legitimate buyer, seller or contractor should give you enough time to verify the details before money changes hands.
