Tips for Avoiding Disaster-Related Fraud

Disasters tend to bring out the best in people. But unfortunately, disasters also can bring out some of the worst in people too. Fly-by-night contractors and scam artists follow in the wake of disasters to prey on vulnerable victims. If you feel you are a victim of fraud, contact reportfraud.ftc.gov.

The following are some of the typical types of fraud that can take place after a disaster and what you can do to avoid them. 

PRICE GOUGING

Occurrences of price gouging following a disaster are well documented. Most businesses are community-minded and deal with their neighbors fairly. Some, however, are not. To report price gouging situations, contact the New Jersey Division of Consumer Affairs at njconsumeraffairs.gov or 800-242-5846 (toll free in New Jersey) or 973-504-6200.

ADVANCE-FEE LOAN SCAM

If you need to get a loan quickly, don't be tempted by promises of “guaranteed” loans for upfront fees. Telephone solicitors may request a loan initiation fee ranging from $100 to several thousand dollars. Fraud prevention experts warn that you may never get a loan or see your money again. To learn more, visit njconsumeraffairs.gov.

BEFORE ANYONE STARTS WORK

The FTC recommends the following to avoid disaster recovery scams before any work begins:

• Contact your insurance company.
• Find out if tree and debris removal contractors need to be licensed in your area.
• Research a contractor’s reputation and work online.
• Check with the local home builders’ association.
• Get more than one estimate.
• Look for signs of a scam. 
• Read the contract carefully.

DOOR-TO-DOOR SOLICITATION AND CHARITY FRAUD

In the wake of a disaster, you may find a series of solicitors at your door seeking donations to help with recovery efforts. In most municipalities, anyone soliciting door-to-door must be registered with the local police department.

For peace of mind, donate directly to the charity of your choice. Frequently, the door-to-door solicitors are only in town long enough to take advantage of the situation.

Before you donate, remember:

• Do not give cash.
• Do not give out your credit card number.
• Do not be pressured into giving.
• Do not give to a charity because you were sent a gift or were offered a "free" prize.
• Do not be fooled by names that sound similar to legitimate charities.
• Do not do business over the telephone — ask for information in the mail.
• Beware of organizations offering to send a courier to pick up your donation.
• Write a check payable only to the charity.
• Beware of appeals that are long on emotion and short on fact.

When people solicit a charitable donation, ask questions:

• What is your full name?
• What is the phone number and address that you are calling from?
• What is the full name of the charity you represent?
• What is the address of the headquarters?
• What is the telephone number?
• How long has the charity been in operation?
• What are its goals and purposes?
• How will my donation be used?
• Is my contribution tax deductible?
• How much of my donation will go directly to the charity?

HELPFUL TELEPHONE NUMBERS

New Jersey Division of Criminal Justice
Department of Insurance Fraud
877-553-7283

Department of Homeland Security
202-282-8000

FEMA National Registration Center
800-621-FEMA (3362)

Small Business Administration (SBA)
Fraud Hotline and Answer Desk (answerdesk@sba.gov)
800-827-5722