"The Contractor Took My Deposit and Ghosted": What You Can Actually Do

If a contractor took your deposit and went quiet, you have more options than it feels like. The fastest is a credit card dispute, which must reach your card issuer within 60 days of the first bill showing the charge. The slowest and most reliable is small claims court, where filing fees run $30 to $100 in California and the process is built for people without lawyers. In between sit a formal demand letter, a complaint to the licensing board and your state attorney general.

This guide puts those steps in a sensible order, works through an example with real numbers and ends with how to avoid a repeat. I am not a lawyer, and the details vary by state, so read this as a map and check specifics with your court or consumer agency.

First, stop and collect your paper

Before you chase anyone, put the facts in a folder. It helps in every route below.

• The contract or estimate, including anything that came by text or email. Terms.law notes oral agreements can also be enforceable, but written is far easier to prove.
• Proof of payment: a canceled check, a card statement or an app receipt.
• Photos of the site as it stands now.
• Every message showing they stopped answering, with dates.
• A one-page timeline: when you signed, when you paid, when work was promised, when they went silent.

Then look up the license. Your state board shows whether the contractor holds an active license, which tells you if a bond or recovery fund is available. In California, for instance, licensed contractors post a $25,000 bond, and the state can handle claims against it. Not every state has an equivalent.

Step 1: If you paid by credit card, dispute it now

This is the quickest way to get money back, and the clock is short. The FTC explains the rules for billing errors on credit cards:

• Your written dispute must reach the issuer within 60 days after the first bill showing the error was sent to you.
• Send it to the billing inquiries address, not the payments address, with your name, account number and a description of the problem. Include copies of receipts or other proof.
• The issuer must acknowledge it in writing within 30 days and resolve it within 90 days.
• You can withhold the disputed amount while it investigates. While the dispute is open, the issuer cannot take collection action on that amount or report you as delinquent.
• Charges for things that “weren’t delivered as agreed” are listed as billing errors.

Use certified mail with a return receipt so you can prove when it arrived. If the 60 days have passed, still call the issuer and ask. Rules for debit cards, checks and payment apps are different and usually weaker, so contact your bank right away if you paid that way. If a check has not cleared, ask about a stop payment.

Step 2: Send a demand letter

Before you file anything, put a short, factual letter in the mail. The FTC’s own advice on complaints is to try to resolve the problem with the contractor first and to follow up phone calls with a letter sent by certified mail, return receipt requested, and to keep copies.

Terms.law, a California law firm, lists what a demand letter should contain:

1. The exact amount you paid and what you expected to receive.
2. The specific problems: breach of contract and, where it applies, a deposit above the legal limit.
3. A demand for a full refund within a stated time. The firm suggests 14 days.
4. A warning that you will file in small claims.
5. A mention of any complaint you have filed with the licensing board.

A letter costs a stamp or two. It proves you gave the contractor a chance to fix things. Some states require one before certain cases can be filed, so ask your court clerk.

Step 3: Complain to the licensing board and attorney general

These cost nothing. Licensing board complaints can lead to discipline, and some boards run arbitration for disputes under a certain size. Terms.law says California’s licensing board handles arbitration for licensed contractors in disputes under $15,000, and quotes an investigation time of 2 to 6 months. That is slow, so do it alongside the other steps, not instead.

The FTC suggests contacting your state attorney general or local consumer protection office, your local home builders association and dispute resolution programs when direct efforts fail. Attorneys general are more likely to act when several complaints name the same contractor, so tell neighbors and post a factual review.

Step 4: File in small claims court

Small claims is made for exactly this kind of dispute. California’s court self-help site gives these basics:

Item	California figure
Limit for individuals	$12,500
Limit for businesses	$6,250
Filing fee	$30 to $100, with fee waivers for people who cannot afford it
Trial	Typically 1 to 2 months after you file
Lawyers	You can get advice beforehand, but a lawyer cannot appear for you

Other states have different limits and fees, some lower and some as high as $25,000, so look up yours. Terms.law adds that a process server costs about $50 to $100, and that you should name both the business and the individual owner, and file in the county where the business is located or the work was to be done. If you cannot find the contractor, ask the clerk about substitute service.

A worked example

You paid an $8,000 deposit on a $24,000 deck and the crew never showed up.

• Deposit as a share of the job: $8,000 ÷ $24,000 = 33%
• California’s residential cap, per terms.law: 10% of the contract, or $1,000, whichever is less. 10% of $24,000 is $2,400, so the cap is $1,000.
• Amount above the cap: $8,000 − $1,000 = $7,000, which may be a violation of the state’s contractor law
• Cost to sue: $30 to $100 filing plus $50 to $100 for a process server, so $80 to $200 in total
• Claim of $8,000 is within the $12,500 individual limit

So you could be risking about $200 in fees to pursue $8,000. Not every state has a deposit cap, so look for yours.

Winning a judgment does not mean the money arrives on its own. A contractor who has vanished may be hard to collect from, which is one reason to dispute by credit card first and file the licensing board claim in parallel.

Step 5: Consider a police report and a lawyer

A police report makes sense when the loss is large or other people were hit, because deposit theft can be a crime in some states. It also creates a record. If your loss is above the small claims limit, or the contract has a large amount at stake, a short consultation with a local attorney can tell you whether to file in a higher court.

Preventing the next one

The FTC’s list of advice for hiring a contractor is the best prevention checklist I know:

• Do not pay the full amount up front, and do not make the final payment until the work is done and you are satisfied.
• Ask about your state’s cap on down payments.
• Get a written contract with the contractor’s name, address, phone and license number, start and completion dates, and every promise about scope and cost.
• If you signed at home, you generally have three business days to cancel, and the contract must say so in writing.
• Watch for scammers’ habits: demanding cash, everything up front, pressure to decide at once, or asking you to pull the permit.
• Pay a deposit by credit card when you can, since it carries the dispute rights described above.
• Tie payments to milestones. A deposit to schedule, a payment when materials arrive, a payment at rough-in and the final payment on completion.

Before you sign, check the license and the insurance. It takes less time than the paperwork above. Compare the price with a realistic range using the Roofing Cost Calculator, the Deck Cost Calculator or the Home Addition Cost Calculator. A bid that is far below the range often comes from someone who needs your deposit more than your job.

Sources

• How To Avoid a Home Improvement Scam, Federal Trade Commission
• Disputing Credit Card Charges, Federal Trade Commission
• Small Claims in California, California Courts Self-Help Center
• Contractor Took Your Deposit: Action Steps, Terms.Law