Ian, what business are you in?
Anyone who has "lost hundreds in deposits with contractors", has to have questionable procedures when "hiring" them. Are you ALWAYS looking for the cheapest price? VERY FEW "reputable" contractors would perform that way, unless YOU are one of those customers who contractors do not want to work for. (Some statements you have made might make me less than enthusiastic to even give you a price quote>)
Ian are you shopping a lot for contractors on CraigsList?
I'm foreign. You all know that. But I'm not a witch.
When I first came to this country, and bought my first house, I was naive enough to think that America's plumbers, electricians and all its other contractors were required by law to be i) licensed; ii) reputable and iii) to do work to code as they are in most other places in the world, at least those that are not in the Third World. Also, as in other countries where I have lived, I believed (falsely) that these requirements were enforced by law.
So, as in England when I needed a service here I took the Yellow Pages and called a contractor from it. For small jobs (under $1000) I would rarely ask for more than one quote. Everywhere else I have lived this works. You get quality services for a reasonable price, give or take a few hundred dollars compared to if you shopped around. Peanuts compared to taking more time off of work. Everywhere else if there are any problems, you either call the police (if they are unlicensed), call the authorities (if they do not do the work to code) or take them to a small claims court without incurring any legal costs (for example if you pay a deposit and they do not show). After all, they're in the Yellow Pages, right, so they must be legit otherwise someone would have shut them down?
Not so in America, it would appear, where "freedom" means a contractor can be listed in the Yellow Pages, for example, run an ad on TV or put a flyer through your door and be none of these things. They can be unlicensed. Even the licensed ones can fail to do work to code. Or fail to pull permits. And they can take people's deposits and not show up for the work. You have very little recourse here, unless you are willing to pay hefty legal fees which I am not, not for a few hundred dollars here and there anyway. And all because Americans are still scared of the Commies and big Government so much so that they'd rather have no rules, or at least no enforcement because there's no Government to do the enforcing! Ever met a county inspector that wasn't rushed off his feet, booked up for weeks in advance and could stay more than five minutes before moving on to his next job? Thought not. Ever wondered how a guy as busy as that could ever find the time to intervene in unlicensed, unpermitted work that's not to code? I have. And the answer is he can't. Because not having a Big Government means not having enough of the public officials this country and its citizens so desperately deserve. I love all your rules and the way you have no means to enforce them.
So it took me quite some time, and getting my fingers burnt on more than one occassion I'll admit, to realise the peculiar way you have to doing business here (word of mouth, only trust local firms and all that). No other country would tolerate the types of cowboys you have operating as contractors. But then again, you've had cowboys run the country so perhaps it's not so much of a surprise that y'all think it's normal. Heck, when even an actor makes the top job anyone with a proper career title must look impressive. Even in the Yellow Pages.
What makes matters worse is that work not to code is ultimately the responsibility of the homeowner and not the contractor. How can this country justify such a silly rule? Almost as silly as contractors pulling permits being the responsibility of the homeowner. Who's protecting the elderly in all this? Man up America and get a bigger Government.
And work from the principle that every contractor you are considering to hire is a thief and a cheat unless you can prove otherwise through taking some of the steps I mentioned in my earlier post. Local firms. And word of mouth. It's the only way to go.
Or DIY like I do. And do your best to get an appointment with the inspector. He's busy, like I said.
If you live anywhere else
other than America...hire someone from the Yellow Pages. It's simpler that way. But you already know that because you've long wised up to the fact that the Communists aren't coming after you. They simply have better things to do.