Unfortunately, natural disasters tend to attract con artists and criminals who take advantage of people who have been devastated. The best way to protect yourself from frauds and scams after a natural disaster is to stay alert and be cautious. The following information will help you understand what to look for and how to stay away from the most common scams.
Home repair frauds
Home repair and cleanup frauds are especially common after natural disasters. It's important to be very careful about hiring anyone to work on your home.
- Be wary of anyone soliciting work. Disreputable contractors often solicit door to door offering rebuilding or cleaning services after a natural disaster.
- Check references. Don't hire anyone to work on your home without getting references and checking out the business with the Better Business Bureau. Also confirm that the business or individual is licensed to do work in your state by contacting your local or state building department.
- Never pay a home contractor or any other vendor in cash. Do not sign over your insurance settlement check. Only pay by credit card or personal check. Be sure not to pay in full up front.
- Always ask for written estimates.
- Get a second opinion before hiring anyone.
- Don't be pressured. Don't fall for hiring someone who is offering a "one-day-only" special or a discount for hiring him on the spot.
Con artists may pretend to solicit money to help the victims of a natural disaster. The made-up name of their group will often be almost identical to a well-known, reputable charity.
- Check out any charitable group you are unfamiliar with. There are nonprofit watchdog groups that evaluate charitable organizations on their performance in a number of areas. Here are two respected organizations to contact:
- Charity Navigator rates organizations based on their financial filings and other information.
- Wise Giving Alliance of the Better Business Bureau offers guidance to donors on making informed giving decisions.
- If the charity isn't listed on these sites, call the charity-registration department in your state attorney general's office to make sure it is legally registered as a nonprofit in your state.
- Ask for and read information about the charity. Give money to organizations you know.
- Be wary of out-of-state organizations, especially if their only address is a post office box.
- Ask the solicitor to describe clearly how your donation will be used.
- Request a copy of the organization's annual report. Legitimate charities will gladly send you written information when requested.
- Never make cash donations and always make your checks payable to the organization, not to the individual soliciting.
- Do not give out your credit card number to a solicitor.
- Be careful when responding to charitable solicitations that come through the mail. Read all solicitations carefully, including the fine print.
- Be alert to potential email scams. Email solicitations may actually link you to a fake website that looks like the site of an established charity, but exists solely to obtain credit card or other personal information illegally.
Some con artists may also pretend to be Federal Emergency Management Agency representatives collecting a "processing fee" for an emergency loan or other assistance. If you get a phone call or visit from someone claiming to be a representative of a particular agency, always call the agency to confirm that the representative is legitimate. To learn more about charity scams, check out this podcast: Giving Without Getting Taken.
Many people lose important papers and documents after a natural disaster. These items, which often contain personal information such as Social Security and credit card and bank account numbers, can be used by identity thieves to make purchases and open new accounts in your name. For your protection, be sure to:
- Contact your creditors immediately to report lost credit cards. Contact your bank if you have lost checks or a bank card.
- Use a paper shredder to dispose of any papers or documents with personal information when you are cleaning up after a disaster so identity thieves can't get your personal information.
- Get a copy of your credit report a few weeks after the disaster to be sure that no one has illegally used your personal information. All Americans are eligible for a free credit report once a year from each of the three major credit bureaus: Equifax, Experian, and TransUnion. Due to security reasons, www.annualcreditreport.com does not work from overseas. If you are stationed outside the United States or deployed overseas, you can print the form to order your report by mail.
Getting help after a disaster
The following organizations provide information to disaster victims about how to get the help they need.
- Recovering from Disaster, available from ready.gov, has information about what to do immediately after a disaster. More extensive information is available for particular disasters through links on the Natural Disasters page.
- DisasterAssistance.gov is a comprehensive website that will help you search for disaster relief by the type of assistance you need or by federal agency.
- The American Red Cross provides extensive information on recovering after a disaster, with specific tips for coping with different kinds of disasters including fires, hurricanes, floods, and winter storms.
Should you experience an unresolved issue with a company about a financial product or service, especially during this vulnerable time, do take the time to register a complaint on the Consumer Complaint Database at the Consumer Financial Protection Bureau. Not only will your complaint get the attention it needs, but you may also help the CFPB supervise companies, enforce federal consumer protection laws and write better rules.