Renovation Deposit Scams
Deposit scams are one of the most damaging tricks in the renovation industry. Here, contractors demand large deposits sometimes as much as 50% or more before work begins, only to disappear or deliver poor results.
While deposits are standard practice, reputable contractors typically request only 10–20% upfront, with additional payments tied to progress milestones. Demanding excessive deposits is a red flag.
Some scammers may also claim they need large deposits to “buy materials.” In reality, honest contractors already have supplier relationships and do not require massive upfront payments.
To protect themselves, homeowners should limit deposits to a reasonable percentage, ensure payment schedules are detailed in writing, and pay by traceable methods. Escrow accounts are another safe option, releasing funds only when specific milestones are completed.
Conclusion
Deposit scams exploit trust and can result in major financial losses. By keeping deposits small, using escrow services, and tying payments to completed milestones, homeowners can safeguard their renovation investments.