Unlicensed contractor complaints in Arizona have increased since 2015


When a consumer is duped by an unlicensed contractor in Arizona, their chance for restitution may come only if their complaint makes it to the office of a county attorney or the state attorney general.

But according to statistics released by the Arizona Registrar of Contractors, no greater than 33 percent of unlicensed complaints have been submitted for prosecution over the last four years.

The ROC reports 2,134 unlicensed complaints were received in 2018, a 31 percent increase from 2015. And despite the ROC submitting 437 complaints for prosecution last year, up from 389 in 2015, the percentage of cases pushed to prosecution is down (23.9 to 20.5).

“The number of complaints is largely related to market rate of construction projects,” said Breanna Bang, public information liaison for the ROC. “This is true for licensed and unlicensed complaints. The more construction occurring in the state, the more unlicensed entities will have the opportunity to be hired (unlicensed) and more opportunity for consumers to believe their project fails to meet workmanship requirements (licensed).”

The ROC was better in pushing complaints to the prosecution level in 2016. Despite the fewest number of complaints with 1,532, the ROC submitted 506 for prosecution that year (33 percent).

Keep in mind, if a complaint is filed in 2016 but submitted for prosecution in 2017, the submission counts towards the 2017 number as the data was pulled based on when a case was submitted, not when it was received.

The West Valley has seen a greater share of cases submitted for prosecution than Arizona over the last three years. Even at the state’s high point in submittals in 2016, the West Valley had 71 cases submitted for prosecution and 166 complaints received, a 42.8 percent rate.

Ms. Bang said the West Valley numbers provided only included complaints with job sites within Peoria, Sun City West, Sun City, Surprise, Glendale, Litchfield Park, Goodyear and Buckeye. The stats do not include unincorporated areas outside of the city limits of those cities.

Also noteworthy is the decrease over the last three years in the state share of complaints in the West Valley: nearly 11 percent in 2016 but lowered to 5.5 percent in 2018.

The ROC is hoping residents know the harms of hiring an unlicensed contractor, and to seek legal ones in the event of incidents like unfinished renovations.

Ms. Bang said a homeowner has no financial recourse through the Arizona Registrar of Contractors if they hire an unlicensed entity to work on their home.

“In many of the unlicensed cases we investigate, the homeowner/consumer thought the contractor was licensed,” Ms. Bang said. “Sometimes the unlicensed entity uses a licensed contractor’s ROC number or business name. Other times the homeowner sees a professional looking truck, business card or flyer and doesn’t do additional research. There are also cases when consumers admit they knowing hired an unlicensed entity because the bid was lower.”

An unlicensed complaint usually starts with an investigator going out to the location of the alleged violation. If there is one, the investigator and the ROC submit the case to a county attorney for possible criminal charges. The victims may request restitution but that would be up to a judge.

But why are contractors not getting licensed?

“Often times individuals are unaware that they need a license to be a contractor in Arizona,” Ms. Bang said. “In other cases, they may have misconceptions about the process of getting licensed. The Agency’s goal when encountering these individuals is to bring them into compliance and help them get their license when appropriate.

“Then there are the individuals looking to take advantage of consumers and those are the cases we submit to the county attorney’s office for prosecution review, for charging.”

The ROC updates daily an online list of unlicensed contractors. Anyone on the list means they have been found guilty of — or have pleaded guilty to — contracting or advertising without a license. Both are Class 1 misdemeanors in Arizona.

The agency recommends hiring only licensed contractors and checking their license numbers for free at roc.az.gov.

If a person comes across someone on the unlicensed list advertising or contracting for a project that requires a permit or is in excess of $1,000 - including labor and materials for the entire project - they can file an unlicensed complaint by downloading the form at roc.az.gov.

Anyone who feels unsafe or in danger should always contact 911 or their local law enforcement.

Listed contractors are often issued a cease and desist order until they can acquire a license. However, Ms. Bang said they are typically unable to apply if they’ve caused financial damage and it was not remediated.

Licensed contractors

The ROC doesn’t only enforce violations by unlicensed contractors. Licensed ones are also held to a standard.

When a residential contractor applies and obtains a license, they must post a cash deposit or surety bond of $4,250 to $15,000. The ROC also has a Recovery Fund which a residential contractor must pay into unless they choose to post a second bond of $200,000.

Those funds aid homeowners when a licensed contractor doesn’t live up to their end of the bargain.

The maximum amount in claims that can be paid out per license is $200,000. After that amount has been dispersed, no further payouts would be allowed until the contractor pays the Fund back.

A contractor cannot be granted a new license without first paying back all money owed to the Fund. Before a contractor can obtain a license, the licensing department checks to see if the members or qualifying parties are listed on any past or current licenses and ensures there are no unresolved issues on those licenses.

Thousands in unfinished work

In March, the ROC summarily suspended the CR-11 Electrical license held by AEOS Energy Inc. (ROC 317617), a Yuma-based contracting business. The license has since been terminated fully.

The agency said it received and substantiated six complaints from Maricopa, Queen Creek and Gilbert homeowners alleging abandonment between Feb. 25 and 27.

Five of the homeowners paid contracts in full. In total, six homeowners lost $183,335.50 with little to no work on any of the projects.

A summary suspension prohibits a licensee from being able to legally contract as of the day it is issued. Also, the ROC must provide the contractor a prompt hearing at the Office of Administrative Hearings. For AEOS, the hearing is 9 a.m. Friday, March 22.

In February, the ROC listed a Scottsdale man on its most wanted list for duping a Buckeye couple out of thousands of dollars.

Also on the list is an El Mirage couple, who were sentenced to probation in 2018 for scamming homeowners out of $138,000 for landscaping duties in the Sun Cities area between 2010 and 2016.

Universal licensing recognition

Contractors looking to move to and work Arizona may not have to reapply for a license as a bill gains momentum in the legislature.

House Bill 2569, introduced by Rep. Warren Petersen, advanced through the Arizona House of Representatives the week of March 1. The bill would make Arizona the first state in the U.S. to allow universal recognition of occupational licenses. It ensures a person does not lose their skills or qualifications simply because they moved to Arizona and haven’t paid into a licensing board.

Patrick Ptak, communications director for Gov. Doug Ducey, said HB 2569 would apply to contracting licenses.

Still, out-of-state contractors would need to apply for their Arizona license with the ROC under HB2569 and meet the requirements of the bill, which include being licensed for a least one year in the original state, in good standing in the contractor’s original state, and other requirements to ensure public safety is protected.

Arizona Consumer Protection Week

March 3 to 9 was Arizona Consumer Protection Week, in conjunction with National Consumer Protection Week. Both are aimed at consumer protection and fighting fraud.

“Since the beginning of my administration, every week is consumer protection week at the Arizona Attorney General’s Office,” Attorney General Mark Brnovich stated in a release. “From getting a refund for every Arizonan who qualified under the terms of the Theranos, Volkswagen and GM settlements, to obtaining judgments against businesses violating the Do Not Call list, our office is fighting for Arizona consumers.”

Mr. Brnovich’s office received more than 16,000 consumer complaints and inquiries in fiscal year 2018. The office was awarded more than $25 million in restitution for victims through consumer fraud lawsuits and legal settlements in 2018, a release states.

In addition, the office recovered more than $3 million for consumers by working with consumers and businesses to settle consumer complaints without taking legal action.

Anyone who believes they are a victim of consumer fraud can contact the Attorney General’s Office in Phoenix at 602-542-5763, in Tucson at 520-628-6648, or outside the metro areas at 800-352-8431.

2018 Top Arizona Consumer Fraud Complaints

Telemarketing and Phone Scams

Motor Vehicle Sales, Repairs, and Rentals

Telecommunications (internet service providers, cell phones, pay TV, bundling)

Mortgage and Real Estate


5 Warning Signs of a Scam

Scammer asks to wire money or pay by gift card

Requests for fees or taxes as a condition to receiving payment

Requests for private information (bank account number, Social Security Number, etc.)

Pressure to pay immediately or lose the opportunity

Offer seems too good to be true (i.e. money left to you from an unknown relative or a grant you did not apply for)

Editor's Note: Gov. Doug Ducey signed into law the universal licensing recognition in April.