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Don't Be a Victim of a Post-Disaster Scam

John Lennox
October 18, 2021

Residents of Gulf Coast states who are still scrambling to recover from recent hurricane damage to their homes — as well as those looking to lend a hand to their impacted neighbors — need to be aware of criminals seeking to take advantage of the situation.

 

Don't Be a Victim of a Post-Disaster Scam

 

The most frequent post-disaster scams fall into a few basic categories. Be sure to familiarize yourself with the fraudulent tactics described below to avoid becoming a victim.

Contractor fraud

After a disaster, many people need repairs before they can safely live in their homes. Sadly, criminals are adept at taking advantage of the urgency residents feel to get such repairs completed.

A common form of contractor fraud involves requiring homeowners to make a large down payment — or even the entire payment — up front for repairs. Fraudulent contractors — sometimes called “storm chasers” — then do fast, substandard work, or simply disappear with the money. To avoid this scam, experts suggest:

  • Get at least three bids and choose a reputable contractor. Be sure each bid is based on the exact same work. Ask each contractor for IDs, licenses and proof of insurance. Also, check with the Better Business Bureau for any complaints about the companies.
  • Never pay in full up front. And never make the final payment until the work is done and you are fully satisfied.
  • Get an agreement in writing. Seek a written contract detailing the work to be done, the materials to be used and the prices for labor and materials.

Another form of contractor fraud is the insurance assignment-of-benefits (AOB) scam. Contractors ask homeowners to sign paperwork that can enable them to collect payments directly from the insurer, sometimes without even doing the work.

Don’t even consider signing an AOB unless you have fully vetted the contractor.

Fake government officials

If someone identifies themselves as a representative of a federal government agency and asks you for money or financial account information to qualify for assistance funds, it’s a scam.

There is never a fee to apply for or receive disaster assistance from the Federal Emergency Management Agency (FEMA) or the Small Business Administration (SBA). If someone calls claiming to be a government official, hang up and call the number listed on that agency’s official website to determine if the call was legitimate. Phone scams often use spoofing techniques; just because the caller ID display on your phone says the caller is from a government agency doesn’t make it so.

Bogus charities

Many people have big hearts and are inspired to donate money and supplies for hurricane relief. Unfortunately, crooks take advantage by creating fake charities. Here are some tips for ensuring your donation actually goes to disaster relief and you stay protected:

  • Donate to trusted, well-known charities with a track record of dealing with disasters.
  • Always verify a charity’s legitimacy through its official website. You can also check out the organization through the Better Business Bureau’s Wise Giving Alliance at GIVE.org.
  • Don’t open suspicious emails requesting donations or other assistance. If you do, don’t click on any links or open any attachments. Scammers like to use charity related emails for phishing attacks and to spread malware.

Fight back

If you’ve experienced a fraud attempt and would like to help protect your community against such crime, visit the Federal Trade Commission website at ReportFraud.ftc.gov. There you can report a scam, learn more ways to protect yourself in the future, and give law enforcement agencies information for their investigations.

To help you avoid charity scams, the FTC also has a helpful guide on Donating Through Crowdfunding, Social Media, and Fundraising Platforms.


Sources
“BBB Tip: Protect yourself from ‘storm chasers’ after a natural disaster,” Better Business Bureau, March 17, 2021. https://www.bbb.org/article/tips/1489-bbb-tip-protect-yourself-from-storm-chasers-after-a-natural-disaster


“How to spot, stop, and report post-disaster scams,” Federal Trade Commission, Division of Consumer and Business Education, Sept. 3, 2021.
https://www.consumer.ftc.gov/blog/2021/09/how-spot-stop-and-report-post-disaster-scams


“Hurricane Ida: La. Attorney General offers guidance for avoiding post-disaster scams,” Lafayette Daily Advertiser, Sept. 10, 2021. https://www.theadvertiser.com/story/news/2021/09/10/hurricane-ida-la-attorney-general-offers-guidance-avoiding-post-disaster-scams/8272008002/