When natural disaster strikes, people pitch in to lend a helping hand. Unfortunately, this often presents an opportunity to scammers. Financial Consultant John Caserta answers our questions about how to avoid natural disaster relief scams.
Typical scams and how to identify them:
Illegitimate Charity Websites
The FTC notes that following a natural disaster, a number of websites related to the event appear to accept donations for people such victims or first responders. However, the problem is there is no way to verify where your donations ultimately end up. And some sites will even use the name of other legitimate charities – such as the Red Cross – to appear credible but it’s often difficult to confirm the relationship.
The Hartford notes that fraudulent contractors often approach victims amid cleanup efforts shortly after a natural disaster occurs. One major red flag that the insurance company identifies is contractors who request large upfront payments. The Better Business Bureau recommends paying no more than one-third of the full cost and having a contract that outlines the payment schedule.
Fake FEMA Job Postings
During 2017’s Hurricane Harvey, fake job postings for FEMA appeared on social media claiming that they were hiring 1,000 people at a rate of $2,000 per week for a period of 90 days. They even provided an 888 number for applicants to contact. But once you called the number, they asked for an application fee. And FEMA also noted that they do not use 888 numbers.
Fake robo-calls claiming that insurance premiums are due to avoid a lapse in coverage are common after a disaster. Always contact the insurance company directly or your local agent to inquire about any questions relating to your coverage.
Other common scams
o Debris cleanup
o Identity theft
o Insurance fraud
o Price gouging
How can you protect yourself?
Make donations directly to the charity through their own website. The BBB maintains a list of accredited charitable organizations that meet its 20 Standards for Charity Accountability. Among these standards are criteria such as governance and oversight, measuring effectiveness, and finances.
Check the National Association of State Charity Officials to see if the charity needs to be registered in your state. If they should be registered and are not, consider giving to another charity.
Following Hurricane Katrina in 2005, the Department of Justice started the National Center for Disaster Fraud (NCDF). If you suspect fraud, contact them to report it.
Never give out personal information. If you’re being contacted by someone posing to be a state official or insurance representative, ask for their name and number and do not give out any personal information. Then, contact the state agency or insurance company directly to inquire about the phone call or incident.