Before you hire a contractor, pay a deposit or buy from a company you found online, it is worth spending ten minutes checking that the business is real. Most companies are honest, but fake contractors, copycat websites and businesses with a long trail of complaints are common enough that a quick check can save you hundreds or thousands of dollars.
Here is a step-by-step checklist that works for any US business, from a plumber or roofer to an online store or a law firm, using free public tools.
The 5-minute version: search the business name with the word "complaints", confirm it is registered with your state, check its professional license if the trade needs one, read reviews on more than one site, and never pay by wire transfer, gift card or crypto.
10 Ways to Check if a Business Is Legit
1. Search the business name with "scam", "complaints" and "reviews"
Search the exact name in quotes with each of those words, and also search the phone number and the owner's name if you have it. Look for patterns: one bad review is normal, but many people describing the same problem (no-shows, deposits kept, work never finished) is a warning.
2. Confirm it is registered with the state
Every LLC and corporation must register with the state where it operates. Search the name on your state Secretary of State's business entity search (search "[your state] business entity search"). Check that the company exists, is listed as "active" or "in good standing", and how long it has been registered. A company formed last month calling itself "established and trusted" is a red flag.
3. Check the professional license
Many trades and professions need a state license. Look it up on the official state site, not a link the business sends you:
- Contractors, plumbers, electricians, HVAC: your state contractor or licensing board.
- Lawyers: the state bar association's attorney search.
- Doctors, dentists, nurses: the state medical or dental board.
- Real estate agents: the state real estate commission.
- Insurance agents: the state department of insurance.
Check that the license is active, matches the business name and has no disciplinary actions.
4. Look up the Better Business Bureau profile
Search the company on BBB.org. You do not need to rely on the letter grade; the useful part is the complaint history and whether the business responded and resolved complaints. Also check BBB Scam Tracker for reports about the company or its phone number.
5. Check the address and phone number
Put the address into Google Maps and look at Street View. Is it a real office, shop or yard, or a mailbox store, virtual office or empty lot? Call the phone number: a legitimate business answers with its name and can tell you where it is based. Service businesses run from home are fine, but they should be open about it.
6. Read reviews on more than one site
Compare reviews on Google, Yelp, the BBB, industry sites and business directories such as ListYourBusiness.us. Be suspicious if all the reviews are five stars, short and vague, posted within a few days of each other, or by reviewers who have only ever written one review.
7. Check the website
- Use ICANN Lookup (lookup.icann.org) to see when the domain was registered. A store that claims 20 years in business on a domain registered last month is lying.
- Look for a physical address, a working phone number, clear refund and privacy policies and real photos rather than stock images.
- Check the spelling of the web address carefully. Scammers copy well-known brands with one letter changed.
- Prices far below everyone else's, especially on popular products, are a classic sign of a fake shop.
8. Ask for proof of insurance
Any contractor working on your home should carry liability insurance, and workers' compensation if they have employees. Ask for a certificate of insurance and call the insurer to confirm the policy is current. Without it, you can be liable if a worker is hurt on your property.
9. Get everything in writing
A legitimate business gives you a written quote or contract listing the work, price, timeline, payment schedule and warranty. Be careful with large upfront deposits: many states limit what home improvement contractors can ask for up front, for example California caps it at 10% of the contract price or $1,000, whichever is less.
10. Pay safely
Pay by credit card where you can, because card payments can be disputed if the work is never done. Never pay by wire transfer, gift cards, cryptocurrency or payment apps to someone you have not met. Real businesses do not insist on these methods, and money sent this way is almost impossible to get back.
Red Flags That a Business Is Not Legit
Especially after a storm, with "leftover materials" or a "today only" price. Reputable contractors rarely sell door to door.
Or a big deposit before any work starts. These payments are hard to trace and impossible to reverse.
A fair offer will still be there tomorrow. Pressure is used to stop you from checking.
Or they ask you to pull the permits yourself. That usually means they cannot.
Businesses that close and reopen under new names often do so to escape complaints and bad reviews.
What to Do if You Have Been Scammed
- Contact your bank or card company immediately to dispute the charge or stop a payment.
- Report it to the FTC at ReportFraud.ftc.gov. For online fraud, also report to the FBI's Internet Crime Complaint Center (IC3.gov).
- File a complaint with your state attorney general and, for contractors, the state licensing board.
- Report it to the BBB and BBB Scam Tracker to warn others.
- Keep everything: contracts, receipts, messages, photos and the names and numbers you were given.
Using a Business Directory to Check a Company
A good business directory is a fast first check. On ListYourBusiness.us every new listing is reviewed before it goes live, and each listing shows the company's address, phone number, website, service area and reviews from customers, so you can compare several businesses side by side. Browse all categories or businesses by state, then use the checks above before you hire.
Frequently Asked Questions
How can I check if a company is legit for free?
Search the name with "complaints" and "reviews", look it up on your state's Secretary of State business search and licensing board, check its BBB profile and complaint history, and confirm the address on Google Maps. All of these are free.
How do I check if a contractor is licensed?
Go to your state contractor licensing board's website and search by the contractor's name or license number. Check that the license is active, matches the business name and has no disciplinary actions. Use the official state site, not a link the contractor gives you.
Does BBB accreditation mean a business is legit?
Not by itself. Accreditation is a paid membership with standards, and many honest businesses are not accredited. The complaint history and how the business responds to complaints are more useful than the badge or letter grade.
How can I tell if a website is a scam?
Check when the domain was registered with ICANN Lookup, look for a real address and phone number, compare prices with other shops, read reviews on other sites and check the web address for misspellings. Prices that are far too low and payment only by wire, crypto or gift card are strong warning signs.
Where do I report a fake business?
Report it to the FTC at ReportFraud.ftc.gov, your state attorney general and the BBB Scam Tracker. For internet fraud, also report it to the FBI's IC3.gov.
Find Trusted Local Businesses
Compare businesses listed on ListYourBusiness.us by category and state, with contact details and customer reviews.
