Post-Disaster Scams: What To Watch Out For After a Flood,
Tornado, Hurricane or Other Disaster!
Scammers come out of the woodwork to take advantage of people who are the
most vulnerable - after a personal crisis or disaster. In the next few months,
we'll be adding pages with tips and warnings!
If you are affected by a flood, tornado, hurricane or other natural disaster,
you should register with FEMA (online
or 1-800-621-FEMA) to see if you qualify for aid.
Tips to avoid being scammed after a flood or other natural disaster:
- Use reliable, licensed contractors - Contact your local building inspector's
office for information on local contractors. You may also check with the local
Better Business Bureau, homebuilders' association, trade council, or your
Attorney General's Consumer Protection to see if the
contracting firm has any unanswered complaints against it.
- Get a written estimate - Be sure to obtain a written estimate for the job and
read the fine print. Compare the services and prices of several reputable
contractors before making a final decision. Hire local contractors, if possible.
Some contractors charge a fee for an estimate, which is often applied to the
price of subsequent repairs they make.
- Check references - Contractors should be willing to provide the names of
previous customers. Call some former customers who had similar work done to make
sure they were satisfied with the job.
- Ask for proof of insurance - Make sure the contractor carries general liability
insurance and workers' compensation. If the contractor is not insured, the
homeowner may be liable for accidents that occur on the property or to the
- Insist on a written contract - A complete contract should clearly state all the
tasks to be performed, all associated costs and the payment schedule. Never sign
a blank contract or one with blank spaces. Make sure the contract clearly states
who will apply for the necessary permits or licenses. Have a lawyer review the
contract if substantial costs are involved and keep a copy for your records.
- Get any guarantees in writing - Any guarantees made by the contractor should be
written into the contract. The guarantee should clearly state what is
guaranteed, who is responsible for the guarantee and how long the guarantee is
- Have work inspected - If excavation work is being performed (e.g., sewers or
basement walls) make sure a qualified inspector examines the work before it is
hidden from view to avoid similar problems in the future.
- Make final payments when the work is completed - Do not sign completion papers
or make the final payment until the work is completed to your satisfaction. A
reputable contractor will not threaten you or pressure you to sign if the job is
not finished properly.
- Pay by credit card - Avoid on-the-spot cash payments. The safest route is to write a
check to the contracting company. A reasonable down payment is 30 percent of the
total cost of the project, to be paid upon initial delivery of materials.
Federal law gives consumers a three-day "cooling off" period for unsolicited
door-to door sales of more than $25.
- Cancel the contract if necessary - Canceling a contract should be done within
three business days of signing. Be sure to follow the procedures for
cancellation that are set out in the contract. Send the notification by
registered mail with a return receipt to be signed by the contractor.