POSTED: Monday, April 1, 2013 - 12:00am
UPDATED: Tuesday, April 2, 2013 - 7:58am
(StatePoint) Each year, thousands of trusting homeowners hire contractors for home repairs or renovation projects. But for many, dreams of a remodeled kitchen, new roof or updated patio are dashed by contractor fraud.
Over half of homeowners who hire contractors state that fraud is their biggest fear, according to a recent online survey conducted for HomeAdvisor.
But savvy homeowners can avoid fraud by recognizing the warning signs and following simple hiring practices. Amy Matthews, home improvement expert and TV host, is sharing five simple steps homeowners can follow to safeguard themselves:
o Look for an established company with a permanent business location and a listed phone number: Fraudulent contractors are often "travelers" -- businesses from out of the area, or contractors with no permanent business location. Making sure a contractor has a permanent business location and a listed phone number will alert homeowners to these "travelers" or other illegitimate contractors.
o Ask for a written, signed contract: Legitimate contractors will have no qualms about signing a contract and providing their business information. This simple step will typically weed out most fraudulent businesses afraid of having their scams discovered.
o Never pay with cash up front: Without cash in hand, unscrupulous contractors have few ways to pull off a scam. Never pay in full with cash before a job is started, and never pay a deposit with cash. Consider a request for a cash payment before work begins as a red flag that the contractor may be attempting to defraud.
o Ask for referrals or check reviews online: Referrals are a simple way to learn about a contractor's track record from a friend, associate or other trusted source. Use websites like HomeAdvisor.com that offer ratings, reviews or screening services as a way to assure that a contractor has a history of honest business dealings and high-quality work.
o Use licensed contractors: A licensed contractor's reputation is at stake when completing work.
Before hiring contractors, check with the state contractor licensing board to see if a license is required. Make sure their license is valid and there are no legal claims against the contractor.
More information about home improvement, maintenance and repair projects, including project cost guides, emergency support and pre-screened professionals, can be found at www.HomeAdvisor.com 
Don't deal with unscrupulous contractors. By taking precautions, you can ensure your home renovation projects are completed professionally and on time.