Homeowner Scams

Here are "red flags" to check out when working with home repair or service companies:

Ask to see the contractor's state licensing credentials, verification of his/her Workmen's Compensation policy as well as proof of liability insurance coverage. It's a good idea to call the insurance company to see if the policy is still in force.
Check out the company with the local Better Business Bureau. They can tell you if there have been any claims against them. If the company has recently come from another area, call the BBB in their former location; Ask to see the company's (and workmen's, if available) credentials. These could include letters of reference, professional designations from national associations, etc. Just as would be required if you were working with someone in a credit situation (which you are), ask if the company is bonded (ask to see verification) and ask if they carry errors and omissions insurance. If you still have questions about their credibility, ask for a bank reference for the company.
Be cautious working with someone who only provides you with references for out-of-town work they've done. The same is true if they have no other local phone number other than the motel down the street!
Run, don't walk, away from the person requiring all cash up front or a significant deposit. (Would YOU demand to be paid before you had rendered a service?) If the explanation is that it is to cover the purchase of materials/supplies, would you really be wise to do business with a company that appears so financially unstable? Many of the signs of trouble are there initially if we'd just pay attention to them.
Be wary if the time for completing the job seems unrealistic (either too short or too long).
Your best bet in sizing up repair company and home service companies: speak directly to others who have recently used this company and their services. Seeing yard signs announcing that "Ajax Concrete has recently poured a new driveway for this homeowner" is weak at best since some unscrupulous companies actually pay homeowners to place advertising signs in their yard.
Get a minimum of three bids. If it's a costly job, six estimates is more the norm.
When in doubt about using a company and/or service, it's best to do nothing at all. There are very few instances when you wouldn't have ample time to first check out the people you're considering dealing with and/or be able to find another company to provide the service. Being cautious will take you a long way in becoming "A Frugal HomeOwner™!"