How to Avoid Fraud after a Storm

“There is no recourse against hiring an unlicensed contractor. We're not saying anything about the good companies that come in to make a decent living, but unfortunately, there are the bad ones that try to come in and suck people's insurance checks and move on.”
- Larry Johnson

Last month FEMA published an alert about identify theft fraud after Tropical Storm Lee hit New York. Residents in Tioga County had encountered a potential fraudster canvassing neighborhoods claiming to be a “financial consultant” doing a survey for FEMA in a bid to obtain personal financial information.

FEMA notes that

Many legitimate persons -- insurance agents, FEMA Community Relations personnel, local inspectors and real contractors -- may have to visit a storm-damaged property. Survivors could, however, encounter people posing as inspectors, government officials or contractors in a bid to obtain personal information or collect payment for repair work. Your best strategy to protect yourself against fraud is to ask to see identification in all cases and to safeguard your personal financial information.

Be suspicious of anyone who:

• Has no proper identification (a shirt or jacket saying FEMA or some other org is NOT enough). Ask to see their photo laminated card.
• Wants your personal financial information
• Asks for cash to fill out a form or for an inspection.
• Demands cash or full payment up front for home repairs. Won't provide a contract.
• Is a contractor with no physical address on their card.
• Urges you to borrow to pay for repairs, then steers you to a specific lender or tries to act as an intermediary between you and a lender.
• Urges you to use a contractor they recommend
• Asks you to sign something you have not had time to review.

To avoid scams:

• Question strangers and demand to see identification
• Never give any personal financial information to an unfamiliar person
• Never sign any document without first reading it fully. Ask for an explanation of any terms or conditions you do not understand
• Do your own research before borrowing money for repairs. Compare quotes, repayment schedules and rates. If they differ significantly, ask why.

Bottom Line

For more information about avoiding charitable giving scams, visit the Federal Trade Commission’s website at http://www.ftc.gov/opa/2011/05/homerepair.shtm