What to Do When a Contractor Takes Your Money and Disappears
You hired someone to renovate your kitchen, finish your basement, or replace your roof. You paid a deposit — maybe half the job — and then the texts slowed down, the site visits stopped, and now they are not returning your calls. It is one of the most common disputes Ruled sees from homeowners across Canada.
The good news: disappearing is not the same as winning. Contractors who take money and fail to deliver still owe you either completed work or a refund. The bad news: you need to act methodically. Emotional messages and vague threats will not get your money back. Documentation, a formal demand, and a clear escalation path will.
Step 1: Stop and document everything
Before you send another angry text, gather what you have. Contracts or quotes, e-transfer or cheque records, credit card charges, before-and-after photos, inspection reports, and every message thread. Note dates: when work started, when it stopped, when they last responded.
- Write a simple timeline while memory is fresh
- Photograph the current state of the work — or lack of it
- Save voicemails and emails; screenshot text messages with timestamps visible
- Identify the legal name on the invoice — sole proprietor vs. numbered company matters for filing
- Look up whether they hold a provincial licence if your province regulates trades
Step 2: Send one clear written demand
Switch from informal chasing to a formal demand letter. State the contract or quote, the amount paid, the work that was promised versus delivered, and the dollar amount you want back (or the completion you require). Give a deadline — 14 days is common.
Send it by email to every address you have, and by registered mail to their business address or the address on the contract. Keep proof of sending. Many contractor disputes end here once the contractor realizes you are prepared to file.
Step 3: Know what you can claim
Your claim is usually the cost to complete or fix the work, or a refund of money paid for undelivered work — whichever puts you in the position you would have been in if they had performed. You may also claim reasonable out-of-pocket costs directly caused by the breach, depending on your province and facts.
Get a quote from another qualified contractor for finishing or repairing the work. That quote can support your damages number if the original contractor disputes the amount. Keep it factual; inflated numbers hurt credibility in small claims court.
Step 4: Check licensing and complaint channels
In provinces with mandatory contractor or home builder licensing, a complaint to the licensing body may help — though it is not a substitute for recovering your money. Consumer protection offices and Better Business Bureau listings add pressure but rarely return your deposit on their own.
Treat these as supplementary. Your direct path to money is still negotiation, demand letter, and if needed, small claims court.
Step 5: File in small claims if they ignore you
If the deadline passes with no payment or acceptable settlement, file in the small claims court for your province. Name the correct defendant — individual, partnership, or corporation — and use the address where they can be served. Wrong defendant or bad service delays everything.
Bring your timeline, contract, payment proof, photos, messages, and any completion quote to the hearing. Tell the story in order: agreement, payment, partial performance, failure to finish, your attempts to resolve, your demand letter, their response or silence.
Common contractor defences — and how to answer them
"The client changed the scope."
Bring messages showing what changed, whether you agreed, and whether extra payment was discussed. Unsigned scope creep is a frequent fight — your written record wins.
"Materials cost more than expected."
Unless the contract allows pass-through increases with notice, this is often their risk. The quote or fixed price controls.
"The work is fine — they are being picky."
Photos, building code issues, inspector notes, or a third-party tradesperson's assessment help show objective problems.
Protect yourself on the next project
- Never pay 100% upfront — staged payments tied to milestones are standard
- Use a written contract with scope, timeline, price, and warranty
- Verify licence and insurance where applicable
- Keep a shared paper trail — avoid verbal-only change orders
- Release final payment only when work passes inspection or your checklist
You do not need a lawyer to start
Most contractor deposit disputes fall squarely in small claims territory. Ruled's free case assessment analyzes your facts and tells you whether pursuit makes sense. If it does, a demand letter or full case pack gives you province-specific documents and a plan — flat fee, no hourly billing.
Getting ghosted after paying a deposit is infuriating. It is also often recoverable if you document well and follow the process. The contractors who count on you giving up are betting you will not send the letter or file the claim. Prove them wrong.