Home Repair and Contractor Scams: Signs and Your Right to Cancel

A home repair scam usually starts at your front door. The Federal Trade Commission lists the signs: a contractor knocks because they are "in the area," says they have materials left over from another job, pressures you to decide right away, and wants everything paid up front or only in cash. After storms and other disasters, the FTC adds more: a "contractor" who says they don't need a license, tells you to sign over your insurance check, or offers to help you qualify for FEMA relief for a fee.

If you signed a contract at your home in the last few days, you may be able to cancel it for a full refund. The FTC's Cooling-Off Rule (16 C.F.R. Part 429) lets you cancel many sales of $25 or more made at your home, and $130 or more made at other temporary locations, until midnight of the third business day after the sale. Stop paying, do not sign anything else, and send your cancellation in writing today. If you already paid and the contractor disappeared, the steps below tell you what to do first.

Information last verified on October 3, 2026. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This page covers the FTC's Cooling-Off Rule (16 C.F.R. Part 429), a federal rule that applies nationwide, and the FTC's published consumer guidance on home improvement and disaster repair scams. It does not cover state contractor licensing laws, state limits on down payments, state home-solicitation or home-improvement cancellation statutes, or mechanics liens. Every state has its own guide on our scams and fraud hub.

Signs of a home repair or contractor scam

The FTC's guide to avoiding home improvement scams names six tells. Any one of them is a reason to slow down; several together are a strong warning.

• They show up uninvited. "Scammers knock on your door looking for business because they are 'in the area.'"
• They have a story about spare materials. "Scammers say they have materials left over from a previous job."
• They rush you. "Scammers pressure you for an immediate decision."
• They want all the money now. "Scammers ask you to pay for everything up front or only accept cash."
• They push the paperwork onto you. "Scammers ask you to get any required building permits."
• They steer you to their lender. "Scammers suggest you borrow money from a lender they know."

After a storm, flood or other disaster

Scammers follow bad weather. The FTC's September 2025 guidance on scams after weather emergencies and natural disasters lists these additional signs:

• "Scammers claim they don't need to be licensed to do the work."
• "Scammers say you'll get a discount, but only if you sign a contract right away."
• "Scammers tell you to sign over your insurance check."
• "Scammers insist you pay by wire transfer, gift card, payment app, cryptocurrency or in cash."
• "Scammers ask you to sign a 'blank contract.'"
• Scammers claim they can help you qualify for FEMA relief, but only for a fee.

That last one has a simple test. The FTC says: "Know that FEMA doesn't charge application fees. If someone wants money to help you qualify for FEMA funds, it's a scam."

The FTC's January 2025 consumer alert describes how these scams usually end. Scammers "appear right after an emergency and offer to get your power back on, make essential repairs," then "they'll take your money and disappear, charge you for things you don't need, or leave before completing the work you paid them to do."

Fake utility workers and officials

Some people at the door claim to be from the utility rather than a contractor. The FTC warns that utility imposters "might call or knock on your door saying they need to repair or replace equipment. Then they'll ask you to pay." Its advice is to "ask for identification and verify who you're dealing with." Our guide to government impersonation scams covers people who pose as inspectors, agencies and officials.

Watch out: If you are helping an older parent or neighbor who was approached at the door, our elder fraud guide explains the extra reporting routes that exist for older adults.

What to do right now

Work through these in order. Speed matters most in the first three business days after you sign.

1. Stop paying. Do not hand over a further deposit, a progress payment or your insurance check, whatever reason the contractor gives.
2. If you signed at home within the last three business days, cancel in writing now. The steps are in the section on the Cooling-Off Rule below. You do not have to give a reason.
3. Do not sign anything else. The FTC warns: "Don't sign a document you haven't read" or one that has blank spaces. Never sign over your insurance check.
4. If you paid by credit card, call the card issuer. The FTC says "Paying by credit card offers you some protections." The rules and deadlines for cards, checks, bank transfers and payment apps are in our guide on how to get money back after a scam. If you paid through a payment app or with gift cards, see our guides to Zelle and payment app scams and gift card scams.
5. Keep everything. Keep the contract, any estimate, receipts, the contractor's business card, photos of their vehicle, and text messages. If they took the money and left, photograph the unfinished work.
6. Report it. The FTC says to report it at ReportFraud.ftc.gov (the FTC also runs ReporteFraude.ftc.gov in Spanish). For a dispute with a contractor, the FTC also points to your state attorney general or local consumer protection office. Our guide to where to report a scam explains what each agency does with a report.

The FTC is direct about payment method. It says: "Pay by credit card or check, never by wire transfer, gift card, payment app, cryptocurrency or in cash. Scammers ask for these types of payments because, once they've collected the money, it's almost impossible for you to get it back."

Your three-day right to cancel: the FTC Cooling-Off Rule

The Cooling-Off Rule is the one federal law most directly on point when a contractor signs you up at your kitchen table. The FTC's summary of the rule says it is "unfair and deceptive for sellers engaged in 'door-to-door' sales" to fail to give buyers the required disclosures about their right to cancel within three business days.

Which sales the rule covers

The rule applies to sales of consumer goods or services, meaning things bought "primarily for personal, family, or household purposes" (16 C.F.R. § 429.0(b)). Repairs and improvements you buy for your own home are generally bought for household purposes. The coverage definition in 16 C.F.R. § 429.0(a) reads:

"A sale, lease, or rental of consumer goods or services in which the seller or his representative personally solicits the sale, including those in response to or following an invitation by the buyer, and the buyer's agreement or offer to purchase is made at a place other than the place of business of the seller (e.g., sales at the buyer's residence or at facilities rented on a temporary or short-term basis, such as hotel or motel rooms, convention centers, fairgrounds and restaurants, or sales at the buyer's workplace or in dormitory lounges), and which has a purchase price of $25 or more if the sale is made at the buyer's residence or a purchase price of $130 or more if the sale is made at locations other than the buyer's residence, whether under single or multiple contracts."

Two points in that text matter for home repair. First, the rule still applies when you invited the seller over ("including those in response to or following an invitation by the buyer"), subject to the exclusions below. Second, the dollar threshold depends on where you agreed to buy:

The thresholds are as published in the eCFR as of October 1, 2026. Because the price counts "whether under single or multiple contracts," splitting one job into several small contracts does not take it below the threshold.

How to count the three business days

Under 16 C.F.R. § 429.1(a), the contract must tell you that you "may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction." The FTC's consumer guide explains the count: "Saturday is considered a business day, but Sundays and federal holidays are not."

So if you sign on a Thursday, the three business days are Friday, Saturday and Monday, and you can cancel until midnight Monday (assuming no federal holiday falls in between).

How to cancel

1. Use the Notice of Cancellation form if the seller gave you one. The rule requires the seller to give you two copies of a form headed "NOTICE OF CANCELLATION" (16 C.F.R. § 429.1(b)). Use it to cancel and keep a copy.
2. If you never got the form, write a letter. The FTC says: "If the seller didn't give you cancellation forms, write a cancellation letter. It must be postmarked within three business days of the sale." Keep a copy.
3. You don't need a reason. The FTC says: "You don't have to give a reason for canceling."
4. Send it so you can prove the date. The FTC says to send the cancellation by certified mail, postmarked before midnight of the third business day. Keep the mailing receipt.

What the seller must give you and do

Section 429.1 lists what a covered seller must do. The rule treats a seller's failure to do these things as an unfair or deceptive practice.

• Give you a completed contract or receipt in your language. It must be "in the same language, e.g., Spanish, as that principally used in the oral sales presentation" (§ 429.1(a)). If the pitch was in Spanish, the paperwork must be too.
• Give you two copies of the Notice of Cancellation form (§ 429.1(b)).
• Tell you out loud. The seller must "inform each buyer orally" of the right to cancel (§ 429.1(e)).
• Not mislead you about it. The seller must not "Misrepresent in any manner the buyer's right to cancel" (§ 429.1(f)).
• Refund you within 10 business days of a valid cancellation. That includes refunding all payments, returning any goods you traded in, and canceling any note or security interest you signed (§ 429.1(g)).
• Hold off on selling your loan paperwork. The seller must not "Negotiate, transfer, sell, or assign any note or other evidence of indebtedness to a finance company or other third party prior to midnight of the fifth business day" after the sale (§ 429.1(h)).
• Tell you what happens to the goods. Within 10 business days of receiving your cancellation notice, the seller must tell you whether it will pick up or abandon any goods it left with you (§ 429.1(i)). Under the notice form, if you make the goods available and the seller does not pick them up within 20 days of your Notice of Cancellation, you may keep or dispose of them; if you do not make them available, you remain liable under the contract.

What the rule does not cover

Section 429.0(a) excludes six kinds of sales. In plain terms, the rule does not apply to a sale:

1. Negotiated earlier at the seller's store. That is, made "pursuant to prior negotiations in the course of a visit by the buyer to a retail business establishment having a fixed permanent location."
2. Where federal law already gives you a right of rescission. This covers sales in which "the consumer is accorded the right of rescission by the provisions of the Consumer Credit Protection Act (15 U.S.C. 1635) or regulations issued pursuant thereto." See the section on contractor-arranged loans below.
3. In a genuine emergency you started, with a handwritten waiver. This one is explained in the next section because contractors misstate it most often.
4. Done entirely by mail or phone. Sales "Conducted and consummated entirely by mail or telephone; and without any other contact between the buyer and the seller or its representative prior to delivery of the goods or performance of the services."
5. Repairs to your personal property that you called the seller to your home to do. The text excludes a sale where "the buyer has initiated the contact and specifically requested the seller to visit the buyer's home for the purpose of repairing or performing maintenance upon the buyer's personal property." But if, during that visit, the seller sells you "additional services or goods other than replacement parts necessarily used in performing the maintenance or in making the repairs," the exclusion does not cover those extras.
6. Real estate, insurance and registered securities. Sales "Pertaining to the sale or rental of real property, to the sale of insurance, or to the sale of securities or commodities by a broker-dealer registered with the Securities and Exchange Commission."

Separately, 16 C.F.R. § 429.3 exempts sellers of motor vehicles at auctions, tent sales or other temporary places of business (if the seller has a permanent place of business) and sellers of arts or crafts at fairs or similar places.

Emergency repairs: the exclusion is narrower than contractors say

A storm-damage contractor may tell you that emergency work can't be canceled. The rule's emergency exclusion, 16 C.F.R. § 429.0(a)(3), has several conditions, and all of them must be met:

"In which the buyer has initiated the contact and the goods or services are needed to meet a bona fide immediate personal emergency of the buyer, and the buyer furnishes the seller with a separate dated and signed personal statement in the buyer's handwriting describing the situation requiring immediate remedy and expressly acknowledging and waiving the right to cancel the sale within 3 business days."

Read the conditions one at a time. You must have initiated the contact. The need must be a bona fide immediate personal emergency. And you must give the seller a separate statement, in your own handwriting, that is dated, signed, describes the situation, and expressly waives your right to cancel. As written, the text does not describe a contractor who knocked on your door, and it does not describe a pre-printed waiver clause in the seller's contract. Whether a particular job met these conditions depends on the facts, and a lawyer or your state consumer protection office can help you assess yours.

If the contractor never told you about your right to cancel

Many door-to-door contractors never mention the three-day right or hand over the forms. Under the FTC's summary of the rule, failing to give those disclosures is itself an unfair and deceptive practice. The FTC's advice when you got no forms is to write your own cancellation letter, postmarked within three business days of the sale.

What the rule text we reviewed does not say is whether your three-day period keeps running when the seller never gave the required notice. If you are past the third business day and never received the notice, contact your state attorney general or a lawyer licensed in your state about your options, and report the seller to the FTC.

Your state may give you more

Under 16 C.F.R. § 429.2(b), the rule does not override state door-to-door sales laws except where they are directly inconsistent with it, and a state law that does not give a right to cancel "substantially the same or greater than that provided in this part" is among those treated as directly inconsistent. Some states may give you a longer period or cover more sales. We have not researched each state's version, so check with your state attorney general or consumer protection office.

Contractor-arranged loans and blank papers

The FTC describes a home improvement loan scam in which a contractor "says he can arrange financing through a lender he knows." The FTC continues: "After he starts work, he asks you to sign papers. They may be blank." Later, "you find out you've agreed to a home equity loan with a high interest rate, points, and fees."

The FTC's advice:

• "Never agree to financing through your contractor without shopping around and comparing loan terms."
• "Don't sign a document you haven't read" or that has blank spaces.
• "Never transfer your deed to anyone without consulting an attorney, a knowledgeable family member, or someone else you trust."

If the work is financed by a loan that gives you a right of rescission under 15 U.S.C. § 1635, exclusion (2) means the Cooling-Off Rule does not apply to that sale; any right to cancel comes from that lending law's rescission right instead. This page does not cover how that rescission right works. If you signed loan papers you did not understand, or papers that turned out to involve your home or your deed, speak to a lawyer soon. Our guide on when a lawyer helps after a scam covers free and official options.

How to hire a contractor without getting scammed

Most of the FTC's prevention advice comes down to checking before you commit and keeping control of the money.

Check the contractor

• Confirm the license and insurance. The FTC says: "Check with your state or county government to confirm a contractor's license, and ask the contractor for proof of insurance."
• Look them up. The FTC suggests checking with your local home builders association and consumer protection office, and searching the contractor's name with words like "scam," "review" or "complaint."

Get written estimates and a written contract

The FTC says an estimate should be in writing and describe the work, the materials, the completion date and the price. It also says: "Don't automatically choose the lowest bidder."

Before you sign, the FTC says your written contract should include:

• The contractor's name, address and phone number, and license number if one is required
• Start and completion dates
• The payment schedule
• Any promises the contractor made out loud
• If you signed at your home or somewhere other than the contractor's place of business, "a written statement of your right to cancel the contract within three business days"

The contract should have no blank spaces when you sign it.

Keep control of the money

• Deposits. The FTC notes that "Some states actually limit the amount of money a contractor can ask for as a down payment. Contact your state consumer protection agency to find out what the law is in your area." Paying everything up front is one of the FTC's listed scam signs.
• Payment method. Pay by credit card or check, as the FTC advises, not by wire, gift card, payment app, crypto or cash.
• Final payment. The FTC says: "Never make the final payment until the work is done and you're satisfied."
• Insurance checks. The FTC says to "never sign your insurance check over to a contractor. Instead, arrange with your bank or credit union for a Certificate of Completion." Ask your own bank or credit union whether it offers that arrangement.

Pro tip: If someone offers to help with FEMA paperwork for a fee, walk away. The FTC says FEMA does not charge application fees.

Getting money back and when a lawyer helps

Whether you can recover money depends mostly on how you paid. A credit card payment has protections the FTC calls out; cash, wire transfers, gift cards, payment apps and crypto are, in the FTC's words, payments where "it's almost impossible for you to get it back." Our guide on how to get money back after a scam walks through each payment method and its deadlines.

If the job involved a large sum, a loan secured by your home, papers about your deed, or a contractor who did damage and left, a lawyer licensed in your state can tell you what applies to your facts. See when a lawyer helps after a scam.

Related guides

• Scams and fraud: the full guide, with a guide for every state
• How to get money back after a scam
• Where to report a scam
• When a lawyer helps after a scam
• Elder fraud
• Government impersonation scams
• Zelle and payment app scams
• Gift card scams
• Utility Scams
• Charity and Disaster Scams
• How to Tell if Something Is a Scam

Last updated: October 3, 2026.

This article is general legal information about US federal law and FTC guidance as verified on October 3, 2026, not legal advice. For your specific situation, contact your state attorney general or consumer protection office, the FTC, or a lawyer licensed in your state.

Frequently Asked Questions

What are the signs of a home repair scam?

The FTC lists a contractor who knocks because they are in the area, says they have leftover materials, pressures you to decide right away, wants payment up front or only cash, asks you to get the permits, or suggests a lender they know.

Can I cancel a contract I signed with a door-to-door contractor?

Often, yes. The FTC Cooling-Off Rule (16 C.F.R. Part 429) lets you cancel many sales of $25 or more made at your home until midnight of the third business day after the sale, with a full refund, unless an exclusion in 16 C.F.R. 429.0(a) applies.

Does Saturday count in the three-day cooling-off period?

Yes. The FTC says Saturday is a business day, but Sundays and federal holidays are not.

How do I cancel a home improvement contract under the Cooling-Off Rule?

Use the Notice of Cancellation form the seller must give you, or write your own cancellation letter if you got no form. The FTC says to send it by certified mail, postmarked before midnight of the third business day. You do not need to give a reason.

Can a contractor refuse to let me cancel because the repair was an emergency?

The emergency exclusion in 16 C.F.R. 429.0(a)(3) applies only if you initiated the contact, faced a bona fide immediate personal emergency, and gave the seller a separate dated, signed statement in your own handwriting waiving your right to cancel. Whether a job met those conditions depends on the facts.

Does the Cooling-Off Rule cover a repairer I called to my house?

Not always. 16 C.F.R. 429.0(a)(5) excludes a sale where you initiated the contact and specifically asked the seller to visit your home to repair or perform maintenance on your personal property, but extra goods or services sold during that visit, other than replacement parts needed for the repair, remain covered.

How much should I pay a contractor up front?

No federal deposit limit is stated in the FTC's guidance, but the FTC says some states limit how much a contractor can ask for as a down payment and to contact your state consumer protection agency. Paying for everything up front is an FTC-listed scam sign.

Should I sign my insurance check over to a contractor?

No. The FTC says never sign your insurance check over to a contractor and instead to arrange with your bank or credit union for a Certificate of Completion.

Does FEMA charge a fee to apply for disaster help?

No. The FTC says FEMA does not charge application fees, and if someone wants money to help you qualify for FEMA funds, it is a scam.

Where do I report a contractor scam?

Report it to the FTC at ReportFraud.ftc.gov. For a dispute with a contractor, the FTC also points to your state attorney general or local consumer protection office.