What Should You Do If a Contractor Takes Your Deposit and Never Starts the Work?

You paid a deposit, the contractor promised to start, and then nothing happened. This is a frustrating and unfortunately common situation. The good news is that you have several concrete steps you can take to recover your money. Acting quickly and keeping a clear record of everything will strengthen your position.

What Is Happening

When a contractor accepts a deposit but fails to begin work, it may be a simple delay, a scheduling problem, or a sign of something more serious like fraud. Regardless of the reason, you are entitled to either the work you paid for or your money back. Your approach should focus on documenting the facts and using the proper channels to demand a refund.

Step by Step: What to Do First

1. Stop all further payments. Do not pay any additional money, even if the contractor promises to start soon. Any new payment increases your risk.
2. Gather your evidence. Collect the signed contract, the deposit receipt or bank record, text messages, emails, and any notes from phone calls. Write down a timeline of what was said and when.
3. Send a written demand letter. Write a firm letter or email stating the amount you paid, the date work was supposed to start, and that you are demanding a full refund within a specific reasonable deadline (for example, 10 to 14 days). Send it by certified mail with return receipt requested, and keep a copy. This creates a paper trail.
4. File complaints with regulators. Contact your state or provincial contractor licensing board and your local consumer protection office. Many have online complaint forms. If the contractor is licensed, a complaint can lead to disciplinary action and may pressure them to refund you. Also file a complaint with the Better Business Bureau if they are a member.
5. Consider legal action. If the deadline passes and you still have no refund, you can sue in small claims court (for amounts within your state's limit) or file a civil lawsuit. You do not always need a lawyer for small claims. The filing fees are usually modest, and you can present your evidence to a judge.
6. Report suspected fraud. If the contractor gave a fake address, used a false name, or has a pattern of taking deposits and disappearing, report it to your local police and your state attorney general's office. This may be a criminal matter.

What NOT to Do

• Do not pay more money hoping the work will start.
• Do not sign any new agreement or release without getting legal advice.
• Do not threaten or harass the contractor; this can hurt your case.
• Do not delay. Some legal claims have time limits, and evidence can be lost.

When to Seek Professional Help

If the amount is large or the contractor is unresponsive, consult a consumer protection attorney or a legal aid organization. Many offer free or low-cost initial consultations. Your state attorney general's office can also guide you on filing a complaint.

How to Prevent This Next Time

• Always hire licensed and insured contractors. Verify their license with your state board.
• Get a written contract that includes a start date, payment schedule, and refund terms.
• Never pay a large deposit upfront. A common rule is to pay no more than one-third down, with further payments tied to completed milestones.
• Pay by credit card when possible; you may be able to dispute the charge.
• Check references and online reviews before hiring.

Your next step is to send that written demand letter today. Keep copies of everything, and if the contractor does not respond by your deadline, move on to filing complaints and considering small claims court. You have rights, and taking action quickly gives you the best chance of getting your money back.