Utah Cracks Down on Widespread Construction Fraud with New State Task Force

Utah officials have launched a comprehensive initiative to combat residential construction fraud, a growing issue that has already cost residents more than $32 million in financial losses over the past three years. The state is responding to the rising wave of complaints—over 2,100 in 2024 alone—with a newly formed task force that brings together multiple agencies and stakeholders to coordinate enforcement, education, and policy reform.

The task force includes representatives from the Utah Department of Commerce, Attorney General’s Office, state lawmakers, law enforcement, the Division of Professional Licensing, and the Division of Consumer Protection, among others. Legislators Sen. Cal Musselman (R-West Haven) and Rep. Thomas Peterson (R-Brigham City) are playing leading roles in the initiative, bringing real-world industry experience to the effort.

“As a building official by profession, I’ve seen firsthand how construction fraud erodes the very foundation of trust essential for a stable housing market in Utah,” Peterson said. He currently works with the Utah Division of Facilities Construction and Management and noted that rampant fraud threatens public trust and economic stability.

“Construction fraud is a direct threat to our efforts to put homeownership back in reach for our kids and grandkids,” added Musselman, who has a background in real estate sales and management.

Residential construction fraud in Utah ranges from unfinished work and fake invoices to false licensing claims and manipulated bids. Officials have also warned of contractors who canvass storm-affected neighborhoods offering free inspections, then cause or exaggerate damage in order to submit inflated insurance claims. Some plumbers have referred homeowners to mitigation companies that push expensive repairs beyond what insurance will cover, often after securing signed contracts in advance.

According to the Division of Consumer Protection, fraud involving new home construction can result in an average loss of $302,000 per victim, making it one of the costliest types of consumer fraud in the state. Already in 2025, Utah has received 1,047 new complaints.

The newly formed task force is taking a multifaceted approach. Enforcement will be led by a dedicated construction fraud prosecutor, and new resources are being developed to empower both consumers and licensed professionals.

Key goals of the task force include:

• Aggressive enforcement of Utah’s construction fraud laws
• Education and outreach campaigns for consumers and industry professionals
• Training local prosecutors on how to pursue fraud cases
• Research and regulatory reform, including a review of other states’ laws
• Drafting new legislation to address gaps in Utah’s building and licensing codes

Steve Waldrip, senior advisor to the governor on housing, strategy, and innovation, emphasized the importance of the task force’s work: “The Task Force’s work to root out construction fraud is an essential piece to bringing affordable housing to Utah. It fosters the trust needed for people to confidently hire quality contractors, especially when investing in and improving older, more affordable homes.”

As part of its broader effort, the Utah Department of Commerce has also introduced a Utah Residential Construction Agreement, a fill-in-the-blank contract template that outlines project expectations and helps homeowners and contractors protect themselves from fraud. It’s designed to serve as either a full agreement or as a reference point for ensuring existing contracts are legally sound.

The agreement, now available through the Utah Division of Professional Licensing’s website, “is designed to empower homeowners and licensed professionals,” the department said. “This resource can be used to fill in the blanks for a new agreement or as a comprehensive point of reference to ensure an existing contract is solid.”

Officials hope the task force and new tools will restore trust in Utah’s fast-growing residential construction sector and safeguard both homeowners and ethical contractors from fraudulent practices.

For more information, visit the Utah Division of Professional Licensing’s official website.

Originally reported by Kyle Dunphey in News From The States.