Avoiding Scams in 2025: How to Spot Unlicensed Contractors in California

The contractor landscape in California is changing — and fast. With the new law increasing the threshold for unlicensed work from $500 to $1,000 starting January 1, 2025, more people than ever may attempt small construction jobs without a license. While this update offers flexibility for homeowners and handypeople, it also increases the risk of contractor fraud and scams.

In this blog, we’ll explore how to spot unlicensed contractors, the dangers they pose, and how you can protect your property, your investment, and your peace of mind in 2025 and beyond.

What’s Changing in 2025? The New $1,000 Threshold Explained

Thanks to California Assembly Bill 2622, a person can now legally perform construction work without a contractor’s license — as long as the total value of labor and materials is under $1,000, no building permits are needed, and they don’t hire workers.

This means a handyman can legally advertise and complete jobs under $1,000 without a license. However, the law also requires that the person clearly state in their advertisement that they are not licensed. If they omit this, or if they try to skirt the rules — that’s when problems begin.

🔗 Read the full bill here
🔗 CSLB Announcement: Handyperson Exemption

Why Unlicensed Contractor Scams Are a Growing Concern

The increased threshold creates opportunity — both for small job contractors and, unfortunately, for scammers. These bad actors often target:

• Seniors
  
  
• First-time homeowners
  
  
• People who want fast, cheap work
  
  
• Homeowners unaware of permit and licensing rules
  
  

These scams can cost you thousands in subpar work, unfulfilled promises, or even legal fines.

Common Warning Signs of Unlicensed Contractors

Be alert to the following red flags:

1. No License Number Provided

Legitimate contractors are proud of their credentials. If someone hesitates to provide their CSLB license number, that's a red flag. You can verify any California contractor’s license instantly on the CSLB license check tool.

2. Requesting a Large Down Payment

By law, a down payment in California should never exceed 10% of the total contract price or $1,000, whichever is less. If someone wants 50% upfront — or even full payment — walk away.

3. Cash-Only Deals or No Written Contract

If a contractor avoids putting things in writing or insists on cash, it’s likely they’re trying to leave no paper trail. A written contract protects both parties — and no reputable contractor works without one.

4. Suspiciously Low Bids

If a bid seems too good to be true, it usually is. Unlicensed contractors often underbid legitimate companies by cutting corners or skipping safety protocols.

Real Consequences of Hiring an Unlicensed Contractor

It’s not just a risk — it’s a liability. Hiring someone unlicensed for work that goes beyond the $1,000 scope can lead to:

• Poor quality work or dangerous installations
  
  
• No recourse if something goes wrong
  
  
• No insurance coverage for accidents or damages
  
  
• Fines for the homeowner if work is done without required permits
  
  

Also, under California law, hiring someone who is not licensed to perform work requiring a license could expose you to civil liability. That means you could be held accountable for injuries, damages, or code violations.

How to Verify a Contractor’s License in California

It’s easier than most people think.

1. Ask for their license number – every contractor should be able to provide this.
   
   
2. Check the CSLB database – go to www.CheckTheLicenseFirst.com or directly to the CSLB website.
   
   
3. Look up their disciplinary record – see if they’ve had complaints or enforcement actions taken against them.
   
   

Pro Tip: A business license is not the same as a contractor’s license.

Special Alert for Seniors: You’re a Primary Target

Scammers often target older adults who are perceived to be more trusting or unaware of new legislation. The California Contractors State License Board (CSLB) runs a dedicated program to help protect seniors from contractor fraud.

Visit the official Senior Scam Stopper™ page for educational resources, event info, and prevention tips.

What to Do If You Suspect Fraud

If you think you’ve been approached by an unlicensed contractor, or if you suspect fraud, don’t wait. Here’s what you can do:

• File a complaint online at the CSLB’s official reporting page.
  
  
• Call the CSLB directly at 1-800-321-CSLB (2752).
  
  
• Contact your local district attorney’s office to report criminal fraud.
  
  
• Report it to the Better Business Bureau at www.bbb.org.
  
  

You can also contact the Statewide Investigative Fraud Team (SWIFT) — a CSLB task force that investigates and penalizes illegal contracting.

Frequently Asked Questions (FAQs)