After Tropical Storm Hilary blasted the Baja and San Diego regions in mid-August, the Federal Trade Commission urged people to watch for a surge in rip-offs.
Opportunists may say they’re performing appraisals, but unless they are licensed appraisers, they lack professional accountability. If they’re improperly doing the work of adjusters, they might be violating state insurance law, too.
Their goal? To fleece people and then walk away from them in their time of need. Today’s climate realities offer schemers plenty of chances to rip people off.
Common Storm Chaser’s Ploy: Unlicensed Appraisal
After any major disaster, people come knocking on doors. They could be pavers, roofers, repair technicians, inspectors, or other contractors who offer speedy assistance, after appraising the damage. Some act like ambulance chasers — lawyers who say they can draft your claim to government agencies or insurance companies.
The Federal Trade Commission (FTC) has the role of guarding homeowners and other consumers against fraud and shady business practices — like opportunists who loiter in a disaster’s wake. Tragedy chasers raked in $2.6 billion last year. Can they top that? So far in 2023, August alone has been a banquet for people who prey on disasters:
- Tropical storm Hilary battered the western United States in August. It was followed by a 5.1-magnitude earthquake not far from Los Angeles. Most homeowners’ policies include wind, tree, and storm damage; plus, California law requires insurers to cover mudslides and wildfire damage. To avoid disinformation, Californians should visit Insurance.CA.gov.
- Fundraising campaigns are ongoing for people displaced in the Maui wildfires, also in August. In Maui, the FBI warned of bad actors taking personal information, pretending to be federal agents deployed to connect victims with assistance.
- At the end of August, multiple storm systems became Cat 4 hurricanes in the Caribbean. One of them, Idalia, has slammed Florida and Georgia. Newscasters are warning people about unlicensed insurance adjusters.
Online scammers widen the pool of looters. The ones lurking on computers collect money and sensitive personal data to exploit or sell. The FBI’s Internet Crime Complaint Center, or IC3, takes reports of online schemes. It then forwards these reports to the appropriate agencies.
How to Sniff Out a Shady Contractor
The Consumer Financial Protection Bureau says to ask pointed questions to anyone who knocks on your door or calls you up to talk about a repair quote:
- May I see your identification and your insurance information?
- How long have you been licensed and can you show me proof of licensing?
- Can you give me three recent recommendations from local customers?
Don’t give anyone cash up front. And in its recent consumer alert, the FTC adds: “And if they won’t give you copies of their license, insurance, and a contract in writing, run.”
If you have storm or fire damage, call your homeowner’s insurance company. File your claim. If it is safe to do so, get an estimate and a go-ahead from the company to start work before making any agreements with contractors.
Note: Insured customers may have work done quickly to correct immediate safety hazards. Communicate with the company and let them know your situation — and put safety first.
How to Know If a Disaster Assistance Offer Is Bogus
Look out for imposters sending messages supposedly from agencies. The Federal Emergency Management Agency assists residents of declared disasters, covering certain damages that insurance doesn’t. If you’re ever in that situation, apply for help (see DisasterAssistance.gov). FEMA won’t do this for you. And government agencies will never call, text, or email people with requests for personal details or payments.
Any official from the state or federal government who turns up in person will wear an ID badge. Again, they don’t ask for fees. Only swindlers request payments by gift card, Venmo, Zelle, Cash App, or by taking your bank account details.
Application forms can be vehicles for identity theft. If you accidentally filed your details with a suspicious person, you can freeze your credit by contacting the credit bureaus: Equifax, Experian and TransUnion. Report a leak of your Social Security number to the Social Security Administration. (See SSA.gov/scam.)
If an email or a series of emails arrive related to disaster assistance or funding, copy the subject line and look it up on the internet to see if it has been flagged for fraud. Fake emails used to be fairly easy to catch because of their fake URLs, and their weird spelling and word order. But with artificial intelligence available to them, scammers now write better. They also have tools to make a phone call look like it’s coming from a legitimate source.
Bottom line: Don’t give out personal details or click on the links. Initiate the calls and website visits yourself, from scratch first — not by following links. And do report suspected fraud, to keep yourself and other people safe from scammers.
The FTC has more information at its FTC.gov/WeatherEmergencies website.
Fundraising for the Victims: Legit or Not?
Some crowdfunding campaigns that spread across social media sites are bogus. This is one reason to think carefully before posting pictures of victims, homes, and damaged property. Online predators have no qualms about taking that imagery and information, and crowdfunding for money off of it.
Some fundraising campaigns use totally bogus photos and concocted stories of tragedies. If you click on a photo and use Google’s image description and search features, you can find out more about a photo and see other photos that match it, identifying its real place and time.
If you receive a thank-you message for a donation you don’t remember making, avoid clicking on the links. These could lead to a scam or a malicious website.
If you have verified a campaign or a charity and wish to donate, use a credit card. Credit cards protect their account holders against fraud.
Charity frauds can be reported to the office of your state’s Attorney General.
In the Wake of a Disaster, Don’t Get Sucked Into a Scam
The key advice is simple. Do not pay cash upfront to a contractor that solicits you. Watch out for unlicensed appraisals. Finally, keep the website address for the federal Department of Justice Disaster Fraud Hotline handy in case you, a friend or a loved one is ever entangled in a scheme to defraud: Justice.gov/DisasterComplaintForm
Supporting References
Gema de las Heras Consumer Education Specialist, FTC Consumer Advice: Potential Scams Following Tropical Storm Hilary in Southern California and Western States (issued Aug. 22, 2023 by the Federal Trade Commission).
Jon Healey for the Los Angeles Times: Disasters Are a Magnet for Fraudsters – Look Out for These Scams (Aug. 22, 2023).
Zoe Han for MarketWatch.com: After Tropical Storm Hilary, Beware of Scammers. Here’s How to Unmask Them (updated Aug. 27, 2023).
Rachel Koning Beals for MarketWatch.com: Living With Climate Change – Hilary Drops Torrential Rain on Southern California as First Tropical Storm in 84 Years (updated Aug. 20, 2023).
Wyatt Haupt Jr. for The Garden Island in Kaua’i: FBI Warns About Recovery, Charity Wildfire Scams in Lahaina (Aug. 16, 2023).
How Do I Avoid Scams and Fraud After a Disaster? Fact Sheet from the U.S. Consumer Financial Protection Bureau.
And as linked.
More on topics: Insurance fraud, Wildfires, Stormwater
Photo credits: Dave Morgan and Pixabay, via Pexels.