New protections against cowboy builders: What the government’s trusted trader and payment schemes mean for you

Hiring someone to improve your home can mean handing over thousands of pounds before much of the work has started. If things go wrong, you could face unfinished or unsafe work, unexpected costs and months of disruption.

New government backed measures aim to reduce that risk. A trusted trader scheme will help you identify businesses that meet certain standards, while a protected payment system will release your money only as agreed stages of the work are completed. The government has also announced stronger regulation of private bailiffs in England and Wales. Here is what the changes could mean for you, and where the protections may fall short.

Why is the government taking action?

More than one in four UK adults who arranged home improvements in the previous 18 months experienced a problem, according to figures from the government announcement. Problems included poor quality or abandoned work, pressure to overpay and builders disappearing after taking upfront payments. More than a third of those affected faced extra costs, losing an average of £750.

The government also estimates that poor service, excessive prices and unfair practices in home and garden maintenance cost you and other customers more than £10.3 billion during 2024. The new measures aim to reduce the risk before you hire a trader, rather than leaving you to chase them after your money has disappeared.

A new trusted trader scheme

From September 2026, a government supported scheme will help you identify home improvement businesses that have agreed to meet higher standards. Businesses joining the Approved Code will need to demonstrate good customer service, transparency and dispute resolution. The Furniture and Home Improvement Ombudsman is developing the scheme with the Chartered Trading Standards Institute.

The first participating businesses should appear by the end of September, with the scheme expected to become fully operational by December 2026.

The code should help you find traders who have committed to:

Providing clear information about their services and prices
Treating you fairly throughout the project
Handling complaints properly
Cooperating with an approved dispute resolution process

However, membership is voluntary, a business that does not appear on the database will not automatically be unreliable. Equally, inclusion will not guarantee that every project goes smoothly. You should treat the scheme as one useful check, not a substitute for researching the trader yourself.

Critics have also questioned whether a voluntary code will stop the worst operators. A rogue trader who already ignores consumer law can simply choose not to join. The National Federation of Builders has argued that existing trusted-trader schemes have not stopped bad operators, while others have called for mandatory licensing and stronger enforcement.

How will the protected payment system work?

The new Trusted Payments system could reduce the risk of paying a builder large sums before they complete the work. Instead of sending all your money directly to the trader, you can place it in a protected account. The system will then release payments in stages when the trader reaches agreed project milestones.

For example, you could release payments after:

Foundations or structural work have been completed
Roofing has been installed and checked
Plumbing or electrical work has been finished and certified
The project has passed a final inspection

This gives both sides greater certainty. The trader knows the money is available, while you know they cannot receive the full amount before completing the work.

The Trusted Payments app is due to launch in September, with more than 100,000 traders expected to have access by the end of the month. Make every milestone precise. “Most of the work completed” leaves room for disagreement. “Electrical installation completed, tested and certification supplied” gives you a clear standard to assess.

Before using the system, check:

Who decides whether a milestone has been completed
What evidence the trader must provide
What happens if you dispute the quality of the work
How you can pause a payment
How and when your money will be returned if the project stops

Never approve a payment simply because the trader says they have finished a stage. Before releasing your money:

Check the work against the contract and agreed milestone
Photograph the completed work
Ask for any required certificates or approvals
Record any defects or unfinished items in writing
For complex or expensive work, consider arranging an independent inspection

Will it protect your deposit?

The payment system could protect deposits and advance payments, but traders will not have to use it. A builder may reasonably ask for a deposit to reserve time or buy materials. However, you should ask what the money covers and request evidence or receipts for significant material costs.

Treat it as a warning sign if the trader:

Demands full payment upfront
Asks you to transfer a large sum to a personal bank account
Will not provide a detailed written quotation or contract
Pressures you to pay immediately to secure a special price
Repeatedly requests money that was not included in the quote

Your payment schedule should follow the progress of the work. Avoid arrangements that leave the trader holding most of your money while you still have most of the project left to complete.

Your rights when building work goes wrong

It’s important to remember that the new schemes do not replace your existing rights. Under the Consumer Rights Act 2015, a trader must carry out their work with reasonable care and skill. If you relied on information the trader gave you about the service, that information may also form part of your contract.

If you did not agree a price beforehand, you should only have to pay a reasonable amount. If you did not agree a completion date, the trader must finish the work within a reasonable time. When work falls below the required standard, you can normally ask the trader to redo it at no extra cost. They must do so within a reasonable time and without causing you significant inconvenience.

You may be entitled to a price reduction if repeating the work is impossible, takes too long or would cause significant inconvenience. The reduction should reflect the seriousness of the problem and could cover the full price in severe cases. Give the trader a reasonable opportunity to put things right unless the work is dangerous, they have disappeared or they have clearly refused to return.

How to protect yourself before work starts

The new database should make checking a trader easier, but you should still do your own research.

Before agreeing to any work:

Get at least three written quotations based on the same specification
Check the trader’s full name, business address and contact details
Check Companies House if you are dealing with a limited company
Contact recent customers rather than relying only on online reviews
Confirm that the trader holds appropriate insurance
Verify any claimed trade association membership
Agree who will arrange planning permission and Building Regulations approval
Sign a written contract with a payment schedule and completion date
Avoid paying the whole cost, or a large proportion upfront

Your contract should describe the work, materials, payment stages and arrangements for waste removal. It should also explain how you and the trader will agree any changes.

If you receive an estimate rather than a fixed quote, ask what could increase the final cost. Make it clear that the trader must obtain your written approval before carrying out extra work or adding charges.

Choose your payment method carefully

How you pay can affect your chances of getting your money back. If the cash price of a single item or service is more than £100 and no more than £30,000, paying at least part of the cost directly by credit card may give you protection under Section 75 of the Consumer Credit Act. Your card provider could share responsibility if the trader breaches the contract or misrepresents the service. Section 75 can become more complicated if you pay through an intermediary or split a larger project into separately priced services. However, paying the deposit by credit card may still provide useful protection when the rules apply.

If you pay by debit card, you may be able to request a chargeback if the trader fails to provide the service. Chargeback is not a legal right and time limits apply. Bank transfers usually offer less protection. Your bank may try to recover money lost through fraud, but it cannot automatically reverse a transfer because you dispute the standard of the work.

The new milestone payment system could offer a safer alternative by holding your money until the trader completes agreed stages.

What should you do when work goes wrong?

Raise the problem as soon as you notice it, explain what is wrong, refer to your contract and state what you want the trader to do.

You should then:

Put your complaint in writing, even if you have already spoken to the trader.
Photograph or film the defective or unfinished work.
Keep your contract, quotations, invoices, messages and payment records.
Give the trader a reasonable deadline to respond and put the work right.
Obtain an independent report if the problem is serious or disputed.
Keep evidence of any additional costs you incur.

Avoid immediately hiring someone else to redo the work unless you need to address an urgent safety risk or prevent further damage. The original trader may then argue that you did not give them a reasonable opportunity to correct it.

If you believe the trader has broken consumer law, contact the Citizens Advice consumer service. It can provide guidance and pass relevant information to Trading Standards. Report suspected fraud to the police or the appropriate fraud reporting service.

You can also use Resolver free of charge to raise and manage your complaint. Resolver can help you contact the business, keep your evidence and correspondence together and escalate the complaint when another resolution route is available.

Rogue traders can remain outside the scheme

The trusted trader code and protected payment system could make home improvements less risky. You will have another way to identify responsible traders and protect your money until agreed work has been completed.

However, the voluntary code will not remove rogue traders from the market. A dishonest operator can remain outside the scheme and continue looking for customers elsewhere. We will see in practice whether the scheme carries out meaningful checks, makes participating traders easy to identify and gives you quick access to redress when something goes wrong.

Until then, protect yourself with careful checks, a detailed contract, secure staged payments and a clear record of everything you agree. If work goes wrong, act quickly and complain in writing. You do not have to accept unfinished, unsafe or poor-quality work simply because the trader has already been paid.

If you have any thoughts on this topic, or any other consumer issues you would like us to cover, feel free to get in touch with us at support@resolver.co.uk

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