Natural disasters bring out the best in some people, but the worst in others. As the nation grapples with the aftermath of the most recent hurricane, victims of the storm’s wrath should also be on alert to avoid becoming victims of financial scammers looking to make a quick buck off those who have already lost so much.
It’s important to take a look a the inner workings of these scams to better understand how good people end up losing a lot of money. The scams themselves are timed so that criminals can take advantage of natural disasters to steal money from unsuspecting individuals. Since a lot of people will give voluntarily to charities to help their fellow humans after disasters occur, scammers often set up fake charities to steal money from those wanting to donate.
The Federal Trade Commission is urging the public to be cautious of potential charity scams and recommends doing some research before donating to ensure that your money will go to a reputable organization that will use the money as promised. The FTC also offers the following tips to consider before you make a donation:
- Donate to charities you know and trust with a proven track record in dealing with disasters.
- Be alert for charities that seem to have sprung up overnight in connection with current events. Check out the charity with the BBB (Better Business Bureau) Wise Giving Alliance, Charity Navigator, Charity Watch, or GuideStar.
- Earmark your funds as best as you can for the disaster so you can ensure your funds are going to disaster relief, rather than into some general fund.
- Never click on links or open attachments in emails unless you know who sent it, even if it’s seemingly from a charity. You could unknowingly install malware on your computer.
- Don’t assume that charity messages posted on social media are legitimate. Research the organization yourself.
- When texting to donate, confirm the number with the source before you donate. The charge will show up on your mobile phone bill, but donations are not immediate.
- Find out if the charity or fundraiser must be registered in your state by contacting the National Association of State Charity Officials. If they should be registered, but they’re not, consider donating to another charity.
Of course, phony charities are only one-way scammers try to get your hard earned money. Many like to take advantage of the actual disaster victims – for the second time. As if dealing with a hurricane isn’t enough, Frank Dorman, a public affairs specialist with the Federal Trade Commission, noted that Federal Emergency Management Agency (FEMA) reported a “robocall scam” in which the message states that your flood insurance premiums are due. People living in the disaster zone are told to pay up in order to be covered for an upcoming disaster. “In order to have coverage for Hurricane Harvey, consumers are told they need to submit a payment immediately,” Dorman noted. “Don’t do it. Instead, contact your insurance agent.” But that isn’t even the worst scam when it comes to taking advantage of those who have already suffered during a disaster.
After natural disasters, many unlicensed contractors and scammers often come into the affected area promising quick repairs at discount prices, Dorman warned. “Always ask contractors for references and call previous clients,” Dorman said. “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.” It’s also important to be skeptical of people promising immediate clean-up and debris removal in exchange for cash. “Some may demand payment up-front for work they never do, quote outrageous prices, or simply lack the skills, licenses, and insurance to legally do the work,” Dorman said. If you wish to hire someone to help with cleanup on your property, make sure you do the following to avoid being scammed:
- Check with local officials to find out whether tree and debris removal contractors need to be licensed in your area. If so, confirm that the license for the contractor you’re considering is current. Never sign any document or pay any contractor before verifying their license.
- Ask a contractor to provide their license and certificate of insurance once they are on your property. If a contractor tells you certain work is covered by your insurance, call your insurance provider to confirm.
- Pay with a credit card or check, and be wary of contractors who ask for a deposit in cash or to be paid in cash. Negotiate a reasonable down payment with full payment to be made only upon satisfactory completion of work.
The BBB also warns homeowners affected by natural disasters to beware of “storm chasers” and out-of-town contractors soliciting businesses. “Although not all storm chasers are scammers, they may lack the proper licensing for your area, offer quick fixes, or make big promises they can’t deliver,” Katherine R. Hutt, BBB national spokesperson said. “Although not all storm chasers are scammers, they may lack the proper licensing for your area, offer quick fixes, or make big promises they can’t deliver,” Hutt said.
- Do your research. Find businesses you can trust on bbb.org. “We have BBB Business Profiles on more than a million home contractors,” Hutt said. “Check your state or provincial government agency responsible for registering and/or licensing contractors.”
- Resist high-pressure sales. Some storm chasers use tactics such as the “good deal” you’ll get only if you hire the contractor on the spot. “Be proactive in selecting a contractor and not re-active to sales calls on the phone or door-to-door pitches,” Hutt advised. “Disaster victims should never feel forced to make a hasty decision or to choose an unknown contractor.”
- Be especially careful of door-to-door contractors. Many municipalities require a solicitation permit if sales people go door-to-door. “Ask for identification,” Hutt recommended. “Check their vehicle for a business name, phone number, and license plates for your state or province.”
- Know your rights and responsibilities. “Check with your town or municipality to see what permits contractors need to work on your property,” Hutt said. “Check with your insurance company to make sure your liability insurance covers falls or injuries to contractors.”
At the end of the day, it’s up to us to protect ourselves from the financial (and other) predators out there. This is by no means a complete list of the measures you can take to protect yourself, nor is it complete in the manner in which people may attempt to scam another. Be cautious and aware at all times. No amount of government or lack thereof will stop bad people from doing bad things but you can be prepared, and trust your gut instincts. You are responsible for your own life and this guide should be a starting point to help you recognize scammers wanting to make a quick buck off of your misery.