Recognizing red flags early in contractor interactions can prevent costly mistakes and protect homeowners from sophisticated scam operations.
Sales Presentation Warning Signs
High-Pressure Sales Tactics
Legitimate energy efficiency contractors provide detailed proposals and encourage homeowners to take time for consideration and competitive bidding. Red flags include:
- Demands for immediate decision-making
- Claims that prices expire "today only"
- Refusal to provide written estimates
- Pressure to sign contracts during initial visits
Exaggerated Claims and Guarantees
Be skeptical of contractors claiming unrealistic energy savings (over 50%) or making specific guarantee claims about utility bill reductions. Legitimate contractors provide realistic savings estimates with ranges rather than specific dollar amounts.
Scare Tactics and Health Claims
Scammers often claim dangerous conditions requiring immediate attention, such as "toxic insulation" or "dangerous air leaks" that pose health risks. While some efficiency problems do affect indoor air quality, dramatic health claims during sales presentations are red flags.
Business Credential Red Flags
Lack of Local Business Presence
Legitimate energy efficiency contractors maintain established local business locations with verifiable addresses and phone numbers. Red flags include:
- Post office boxes instead of business addresses
- Only cell phone contact numbers
- No verifiable business history in the area
- Reluctance to provide business references
Missing or Invalid Licenses
All legitimate contractors must carry appropriate state and local licenses for their work types. Red flags include:
- Refusal to provide license numbers
- Claims that licensing isn't required for their work type
- Invalid or expired license numbers
- Operating under multiple business names
Inadequate Insurance Coverage
Legitimate contractors carry comprehensive liability insurance and workers' compensation coverage. Request certificate of insurance and verify coverage directly with insurance companies before allowing work to begin.
Contract and Documentation Warning Signs
Vague or Missing Contract Terms
Legitimate energy efficiency contracts include detailed specifications, material brands and models, completion timelines, and warranty information. Red flags include:
- Handwritten contracts or agreements
- Missing material specifications
- Vague completion timelines
- No warranty information
Unrealistic Financing Terms
Be cautious of contractors offering financing that seems too good to be true, including zero-interest loans or payments that don't begin for extended periods. Review all financing documents carefully and understand total costs and payment obligations.
Pressure to Sign Immediately
Legitimate contractors provide contracts for review and encourage homeowners to take time for consideration. Pressure to sign immediately, claims that contracts must be signed "today," or refusal to allow contract review time are major red flags.