MCC Codes
1761

Roofing, Siding, and Sheet Metal Work Contractors

A guide for underwriters at ISOs and Acquirers onboarding MCC 1761 roofing and siding contractor merchants, covering risk assessment, fraud signals, and the underwriting questions that matter.
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Table of Contents
Overview
Business Types
Payment Processing Info
Key Risks & Concerns
Common Fraud Signals
Example Scenarios
Common Questions
Ongoing Monitoring
Useful Sources

Underwriting Cheat Sheet

If you're underwriting a roofing and siding contractor, MCC 1761 concentrates risk around storm-chasing crews, insurance claim financing, and large deposits followed by abandoned jobs. Disputes spike after storms when fly-by-night operators take deposits and disappear, and assignment of benefits arrangements complicate who actually paid. Here's what to look for.

Key Information

This guide covers roofing, siding, and sheet metal contractors, where storm-driven demand, insurance claim work, and large deposits create concentrated fraud and chargeback exposure.

Typical Business Types

Residential Roofing Contractors

#1
Crews replacing and repairing residential roofs.

Siding and Exterior Contractors

#2
Installers of vinyl, fiber cement, and metal siding.

Commercial Sheet Metal Roofers

#3
Contractors handling flat, metal, and commercial roof systems.

Payment Processing Information

Transaction Types

1

Roof Replacement Deposit

Upfront card payment to schedule materials and crew.
2

Progress Billing

Milestone card payments across tear-off and install.
3

Final Completion Payment

Balance charged after final inspection and approval.
4

Insurance Deductible Payment

Card payment of the homeowner deductible on claim work.
5

Storm Repair Call

Card payment for emergency or smaller repair jobs.

Common Payment Methods

Credit and Debit Cards - Used for deposits, deductibles, and repairs
Insurance Claim Proceeds - Carrier payments routed through the homeowner
ACH and Bank Transfer - Common for commercial draws
Buy Now Pay Later - Financing on full roof replacements
Recurring Draws - Milestone billing across the project

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Key Risks & Concerns

Fraud Risks

  • Storm Chaser Deposit Fraud - Transient crews taking deposits and leaving
  • Insurance Claim Inflation - Padding scope or billing on claim work
  • Abandoned Job Disputes - Chargebacks after work stops mid-project
  • Deductible Waiver Schemes - Improperly waiving or financing deductibles
  • Unlicensed Storm Operators - Out-of-area crews without local licensing

Regulatory Challenges

  • State Contractor Licensing - Roofing licensing and bonding requirements
  • Insurance Claim and AOB Rules - Assignment of benefits and claim handling laws
  • Mechanics Lien Rules - Lien rights and notice on roofing projects
  • OSHA Fall Protection Standards - Roof and height safety requirements
  • Home Improvement Contract Laws - Deposit caps and cancellation rights

Common Fraud Signals

Post-Storm Volume Spikes

Sudden surges following major weather events.

Large Deposits, No Completion

Big upfront charges with stalled or missing work.

Out-of-Area Operating Pattern

Crews billing far from any verifiable base.

Example Scenarios and Red Flags

No Verified License or Bond

Roofing licensing cannot be confirmed locally.

Transient or PO Box Address

No fixed, operational business location.

Abandoned Job Disputes

Homeowners reporting unfinished roofs after deposits.

Deductible Manipulation

Patterns suggesting improper deductible handling.

Insurance Scope Inflation

Billing inconsistent with documented claim scope.

Common Underwriting Questions

UW Tips Business

  1. Verify state roofing licensing and bonding
  2. Confirm a fixed, local operating address
  3. Check insurance including general liability and workers comp

UW Tips Financial

  1. Understand storm-driven seasonal volume spikes
  2. Review average ticket on full roof replacements
  3. Assess the share of insurance claim work

UW Tips Risk

  1. Examine deposit caps and cancellation policies
  2. Evaluate assignment of benefits and claim practices
  3. Review chargeback reasons across draws and completion

UW Questions Business

  1. Are you a licensed and bonded roofing contractor locally?
  2. Do you have a fixed business address and local crews?
  3. What insurance coverage do you carry?

UW Questions Payments

  1. How do you structure deposits and progress draws?
  2. How do you handle insurance proceeds and deductibles?
  3. What share of work is storm and claim driven?

UW Questions Fraud

  1. How do you prevent abandoned-job disputes after deposits?
  2. How do you handle assignment of benefits arrangements?
  3. How do you document claim scope and billing?

UW Questions Compliance

  1. Do your deposits comply with state caps?
  2. How do you comply with assignment of benefits rules?
  3. Do you provide lien waivers on progress payments?

UW Questions Chargebacks

  1. What is your chargeback ratio and what drives it?
  2. How do you document completion and inspections?
  3. How do you handle deductible and claim disputes?

UW Questions Infrastructure

  1. Is your billing tied to project milestones?
  2. How do you reconcile insurance proceeds and card payments?
  3. Do you retain signed contracts and inspection records?

Ongoing Monitoring

Transaction Monitoring

  • Watch volume spikes after major storms
  • Track large deposits with no completion billing
  • Flag out-of-area or transient operating patterns

Compliance Checks

  • Keep roofing license and bond current
  • Maintain claim, AOB, and lien waiver records
  • Stay current on home improvement deposit rules

Security Updates

  • Use card verification on large deposits and deductibles
  • Apply tokenization for stored milestone cards
  • Document scope and inspections to defend disputes

Risk Assessment

  • Tighten review after major weather events
  • Watch for storm-chaser deposit fraud
  • Scrutinize insurance scope and deductible handling

Merchant Communication

Help the contractor document scope, completion, and inspections that defend against abandoned-job disputes. Share deposit and assignment of benefits practices aligned with state law. Support cash flow planning across storm-driven demand spikes.

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Useful Sources

Visa Merchant Data Standards Manual

PCI DSS Quick Reference

NRCA Roofing Industry Resources

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