It’s inhumane that survivors and good Samaritans alike need to beware and fend off unscrupulous characters after a natural disaster. Cleaning up and rebuilding is hard enough without adding fraud into the mix.
But the fact is, disasters do bring out the best in some people, and the worst in others.
This article identifies common scams after natural disasters and provides tips from the U.S. Better Business Bureau (BBB), the Federal Trade Commission (FTC), and the Internal Revenue Service (IRS) on how to stay safe, save money and avoid frauds.
The Robo-call Scam: Flood Insurance Premiums are Due.
In the wake of Hurricane Harvey in 2017, storm survivors received robo-calls saying their insurance premium was past due and in order to have coverage for Hurricane Harvey, they needed to submit payment immediately or their flood insurance would be canceled. This, of course, is a scam designed to fleece already desperate people.
Survival Tips: When it comes to information about your insurance policy, directly contact your insurance agent or the company. Don’t entertain unsolicited phone calls whether it’s a robo-call or someone claiming to be from your insurer. Just hang up.
Remodeling, Repairman and Storm Chasers Scam.
These three scams are basically the same thing – unlicensed contractors and storm chasers who come into the affected area promising quick repairs, clean-up and debris removal.For local contractors, the BBB warns of storm chasers who offer to help you help victims and/or offer to pay substantial amounts of money to use your business’s established name, reputation, and phone numbers.
For homeowners, beware of out-of-town contractors soliciting businesses. It should also be a red flag if any contractor asks you for full payment or a large percentage upfront (you should pay no more than 1/3 of the full cost of the job) or pressures you into employing his or her services.
Survival Tips: Research and Verify. While it’s tempting to jump at the first opportunity to get your life back in order, do your homework. First, check with your town or municipality to see what permits contractors need to work on your property and call your insurance company to make sure your liability insurance covers falls or injuries to contractors.
Commit to getting at least three detailed written estimates from companies you have investigated and confirmed to be legitimate. Ask your neighbors how much they are paying for similar work. Negotiate a reasonable down payment with full payment only upon satisfactory completion of work and insist that payments be made to the company (not an individual) via check or credit card. This is your additional protection.
Ask contractors for references, a copy of their license and their current certificate of insurance. Never sign any document or pay any contractor before verifying their license. Also, write down the driver’s license and vehicle information – make, model, and license plate number – in case you need to report the contractor to authorities.
Misuse of an Assignment of Benefits (AOB) Contract.
The Assignment of Benefits gives a contractor or other third party the right to make decisions on your behalf. This means the contractor now knows how much money your insurer is willing to spend on repairs. If they are dishonest, they can go directly, and even frequently, to your insurance company with severe/inflated claims.
Survival Tips: Door-to-door contractors try to pull of this scheme right after a natural disaster, while you’re still feeling overwhelmed with all the loss and devastation. It might seem simpler and even logical to let the contractor and the insurance company deal with the financial side of things while you focus on your family, but it’s not worth it.
It’s better if you handle payments to the contractor and reimbursements from the insurance company yourself. This ensures that the repairs you get are not more (or less) than what you need, that the right claims are filed and, more importantly, that your insurance premiums remain affordable in the future.
When a natural disaster strikes, we all feel the urge to jump right in and help – to do and give all we can as soon as possible. Speed is the currency of necessity. Scammers know this all too well and will start bogus victim-relief funds and charities while the news headlines are hot.
Survival Tips: Verify the legitimacy of the soliciting organization/charity. Only donate to charities with a proven track record in dealing with disasters or, better yet, support the efforts of the charity you already have a donation history with. This ensures that whether you donate money online, via text, phone call, crowdfunding or drop off goods or volunteer your services, your efforts will reach their intended recipients.
Be alert for charities that seem to have sprung up overnight, especially on social media. Most legitimate nonprofit websites typically end in “.org” and not in “.com”. You can also check out the charity with the BBB Wise Giving Alliance, Charity Navigator, Charity Watch, or GuideStar.
Time is on your side.
It’s wise to remember that for many communities, recovery will take months or even years to accomplish and those who truly want to help these communities bounce back—good-hearted people like you—will have plenty of time and opportunities to help.