How to Avoid Contractor Fraud and Rogue Traders in London

Understanding how contractor fraud typically works makes the warning signs easier to recognise:

• **The 'work already started' approach (often targeting elderly homeowners)**:
• •An uninvited caller claims to have noticed a 'serious problem' with your roof, pointing, driveway, or gutters while working nearby
• •They offer to fix the problem immediately at a 'special rate' for the same day
• •Once access is granted and work 'starts', the price escalates dramatically, or work stops and payment is demanded for work not completed
• •Classic warning sign: uninvited, unsolicited approach; pressure to decide immediately; no written quote

• **The deposit disappear**:
• •Contractor collects a large deposit (often 30–50% of the project value), sometimes starts work briefly, then disappears
• •The business may be dissolved, the number disconnected, or the individual simply uncontactable
• •Classic warning sign: contractor insists on large deposits in cash; company has very recent Companies House registration date; no fixed address or VAT number

• **The 'drip pricing' or 'scope creep' fraud**:
• •A low initial quote wins the job; once work starts, the price escalates with 'unexpected' problems, 'necessary' extras, and demands for payment before proceeding
• •Each escalation feels small relative to the project; by completion, the final cost is double the original quote
• •Classic warning sign: very low initial quote relative to competitors; no clear scope of works in writing; requests for cash payments at each stage

• **The fake credentials approach**:
• •Contractor claims membership of trade schemes (FMB, NICEIC, Gas Safe, NHBC) without actually being registered
• •Uses a logo from the relevant body without current registration
• •Classic warning sign: always verify directly on the scheme's register online — never rely on a logo on a website, van, or business card alone

• **The 'building regulations not needed' approach**:
• •Contractor claims that planning permission or Building Regulations approval are not required for works that clearly require them
• •May offer to 'handle' it themselves — then fail to submit
• •Creates a retrospective compliance problem for the homeowner when they come to sell or refinance
• •Classic warning sign: any contractor who advises you not to bother with Building Regulations should be treated with extreme caution

• **Step 1 — Companies House check**:
• •For any limited company, search Companies House (companieshouse.gov.uk) — free search
• •Check: when the company was incorporated (very recent = higher risk), whether accounts are filed on time (late filing is a warning sign), whether there are any dissolved or struck-off companies of the same name or director, whether director addresses and details look legitimate
• •For sole traders: less information available, but ask for a full name and check public records

**Step 2 — Trade scheme verification (always go direct to the scheme)**:

*Federation of Master Builders (FMB)*: fmb.org.uk/find-a-builder — search directly on the FMB website, not via the contractor's own claim

*TrustMark*: trustmark.org.uk — government-endorsed scheme covering a wide range of trades

*NICEIC (electrical)*: niceic.com — the authoritative register for electrically approved contractors

*Gas Safe Register*: gassaferegister.co.uk — mandatory for any gas work (installation, maintenance, repair); every gas engineer must be individually registered

*NHBC*: nhbc.co.uk — for new-build warranty and NHBC registered housebuilders

*Checkatrade, TrustATrader, Which? Trusted Traders*: consumer review platforms — check the actual reviews, not just the headline score. A small number of reviews from a recently registered company should be treated cautiously.

• **Step 3 — Insurance verification**:
• •Ask to see a current certificate of Public Liability Insurance (PLI) — minimum £2m cover, preferably £5m
• •Check the certificate is current (not expired), covers the type of work being done, and matches the trading name of the contractor
• •For larger contracts, ask for Employers' Liability Insurance (legally required if they employ anyone)

• **Step 4 — References (real ones)**:
• •Ask for 2–3 references from recent completed projects of a similar type in London
• •Call the references; visit the property if possible (with the reference's permission)
• •Ask the references: did the contractor finish on time? Were there unexpected price increases? Would you use them again?

• **Step 5 — Written contract**:
• •Never proceed without a written contract or at minimum a detailed written scope of works and payment schedule
• •The contract should clearly state what is included, what the price is, when each stage of payment is due, and what constitutes completion
• •See our separate guide on JCT Minor Works contracts for more detail

• **The golden rule for deposit size**:
• A reputable contractor does not need a large deposit. Standard commercial practice is:
• •10–20% deposit at contract stage — sufficient to cover initial materials procurement
• •Stage payments aligned to build progress (e.g., 25% at foundation completion, 25% at first fix, 25% at second fix, 10% at completion, 5% snagging)
• •Final 5–10% retained until the snagging list is complete and all Building Regulations inspections are passed

**Red flag**: any request for more than 30% of the project value before work starts, or requests to pay in cash at any stage.

• **Payment methods and protection**:
• •Pay by credit card where possible for amounts up to £30,000 — under Section 75 of the Consumer Credit Act, the credit card company has joint liability with the contractor if the contractor fails to deliver
• •Bank transfer (BACS) is less protected — once sent, recovery depends on bank fraud reporting and legal action
• •Never pay cash — you have no record, no protection, and no recourse

• **What to do if you are mid-project and concerned**:
• •Stop further payments immediately until the concern is resolved
• •Document everything — photographs, written records of communications
• •If work has stopped: send a formal written notice requiring the contractor to return to site within a specified period (typically 7–14 days); keep a record
• •Trading Standards: report rogue traders to your local Trading Standards office (accessible via 0808 223 1133 or citizensadvice.org.uk/consumer/)
• •Checkatrade and scheme bodies: report to the scheme the contractor claims membership of — this triggers investigation and can lead to removal from the register

• **Retention and defects liability**:
• •A 5% retention held for 6–12 months after practical completion is standard commercial practice
• •This retention provides security during the defects liability period — any defects identified in the retention period are remedied by the contractor before the retention is released
• •A contractor who refuses to accept any retention should be asked to explain why