There are many ways to determine if warning signs exist. Searching sites online, like the Better Business Bureau at the link above, could indicate whether previous complaints have been filed against the business or contractor.
If they are, then they should be able to provide the documentation to you before you sign a contract.
Most reputable contractors have many verifiable references regarding their work.
Verbal arrangements are very difficult to prosecute. Contracts provide details, at a minimum, regarding what work is to be completed and when it should be completed
Many scammers will offer "special deals" using "left over materials." Often, they have unmarked vehicles, with small or no company logos. They might have out of state license plates. Scammers will often have "P.O. Box" addresses or temporary addresses. If any of these apply, they should be treated as warning signs for potential fraud.
If your contractor asks you to obtain a permit, this could indicate that they are not licensed. You should also be cautious if you are told that a permit is not necessary. To determine if a permit is necessary, contact the Loudoun County Building and Development office at 703-777-0220.
Often, scammers will use pressure tactics asking you to pay a large portion of the total up front and in cash. Use of any high pressure, scare or threatening sales tactics should immediately raise concern.