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!
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 state's 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 house/building.
- 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 valid.
- 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.
And please let us know about any suspicious calls or emails you receive. We look for patterns so that we can alert the authorities and victims to new scams, before it is too late!