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Natural disaster fraud

Disaster Fraud: Protecting Yourself from Scammers in the Aftermath » Identity Theft Protection » Disaster Fraud: Protecting Yourself from Scammers in the Aftermath



Disaster fraud refers to any type of fraudulent activity that takes advantage of natural disasters, emergencies, or other crises. These fraudulent activities may include charity scams, insurance fraud, identity theft, and price gouging, among others. Unfortunately, during times of crisis, vulnerable individuals and communities can become easy targets for fraudsters seeking to profit from their hardship. As a result, disaster fraud can exacerbate the devastating effects of a disaster, leaving victims with even more challenges to overcome.

Natural disasters, such as hurricanes, earthquakes, and wildfires, can cause significant damage and displacement for individuals and communities. In these times of crisis, many individuals feel a strong urge to help and donate to disaster relief efforts. However, with the rise of disaster fraud, it’s important to take precautions to ensure that donations go to legitimate organizations and actually help those in need. By being aware of the signs of disaster fraud and taking steps to verify the legitimacy of a charity or relief organization, individuals can help ensure that their donations make a meaningful impact and truly support those affected by the disaster.

Most people can’t travel to the destruction that’s ravaged cities and neighborhoods to offer hands-on help with cleanup and other disaster relief. So, donating money is the disaster relief go-to for many. Before you donate to relief, though, make sure that your donation isn’t going to a scammer or organization that won’t do what it promises.

“Charity fraud schemes can happen at any time, but they are especially prevalent after disasters,” warns the FBI. “Criminals use tragedies like hurricanes and fire to exploit those who want to help. Scammers will leverage a natural disaster to steal your money, your personal information or both.”

When disasters strike, people often come together to support those affected by donating money, goods, or services. Unfortunately, some individuals use these unfortunate circumstances as an opportunity to deceive and defraud others. Disaster fraud involves various deceptive practices, such as fraudulent charities, contractor scams, identity theft, insurance fraud, false damage claims, and price gouging. Understanding the types of fraud can help individuals identify potential scams and protect themselves.

What is Disaster Fraud?

Disaster fraud refers to any fraudulent activity that occurs in the aftermath of a disaster. It can involve both individuals and organizations who seek to exploit the vulnerabilities created by a crisis. These fraudsters often prey on the victims’ desperation and the general chaos surrounding a disaster to carry out their schemes. From fake charities that claim to help victims to contractors who take money but fail to complete the work, disaster fraud takes many forms.

Types of Disaster Fraud

Fraudulent Charities

One common form of disaster fraud is the creation of fraudulent charities. Scammers set up fake organizations or use names that sound similar to legitimate charities to collect donations from well-meaning individuals. These funds rarely reach the intended recipients, causing further harm to those affected by the disaster.

Contractor Fraud

Contractor fraud occurs when dishonest contractors take advantage of disaster-stricken areas. They may offer repairs or services at inflated prices, demand upfront payments but never complete the work, or use substandard materials. This type of fraud not only steals money from victims but also leaves them with incomplete or shoddy repairs.

Identity Theft

Disasters can create an environment where personal information is vulnerable. Scammers may pose as relief workers, insurance agents, or government officials to obtain sensitive information from victims. This stolen information can be used for identity theft, leading to financial loss and long-term consequences for the victims.

Insurance Fraud

During disasters, individuals may attempt to defraud insurance companies by submitting false claims or exaggerating the extent of the damage. Insurance fraud drives up costs for everyone and can result in higher premiums or denial of coverage for those genuinely in need.

False Damage Claims

Some individuals take advantage of disasters to file false damage claims. They may exaggerate the damage done to their property or claim losses that never occurred. These fraudulent claims put a strain on relief efforts and divert resources away from those who genuinely require assistance.

Price Gouging

In times of crisis, the demand for essential goods and services often increases significantly. Fraudsters exploit this by engaging in price gouging, where they charge exorbitant prices for necessities such as food, water, and fuel. Price gouging not only exploits vulnerable individuals but also contributes to the overall chaos and hardship in disaster-stricken areas.

Warning Signs of Disaster Fraud

Recognizing the warning signs of disaster fraud can help individuals avoid falling victim to scams. Here are some red flags to watch out for:

Unsolicited Contact

Be cautious of unsolicited phone calls, emails, or visits from individuals claiming to be relief workers or representatives of charitable organizations. Legitimate organizations typically do not make unsolicited contact seeking donations.

High-Pressure Tactics

Scammers often use high-pressure tactics to rush individuals into making quick decisions or donations. They may create a sense of urgency, claiming that immediate action is required to help those in need. Take your time to research and verify the legitimacy of any organization or individual before providing assistance or making donations.

Lack of Documentation

Legitimate charities and contractors will provide documentation such as licenses, permits, or written agreements. Be wary of individuals who cannot provide proper documentation or avoid giving you detailed information about their organization or services.

Unusual Payment Requests

Scammers may request payment in cash, wire transfers, or gift cards, as these methods are difficult to trace. Legitimate organizations typically offer secure and traceable payment methods. Exercise caution when asked to make payments using unconventional methods.

Incomplete or Shoddy Work

Contractors involved in fraudulent activities may perform substandard work or leave projects unfinished. Beware of contractors who demand large upfront payments, fail to provide written contracts, or exhibit unprofessional behavior.

How to Protect Yourself from Disaster Fraud

Protecting yourself from disaster fraud requires diligence and caution. Consider the following measures to safeguard your interests:

Research the organization

Whether you are trying to help others or yourself make sure your money is going to an honorable company.

Verify Charity Credentials: Before donating to a charity, research its legitimacy and ensure that it is registered and recognized by relevant authorities. Websites like Charity Navigator or the Better Business Bureau can provide valuable information and ratings for various charitable organizations. Look up whether the charity is listed and accredited with the Better Business Bureau (BBB) Wise Giving Alliance and follows all 20 of the BBB charity standards. If the charity isn’t listed with the BBB, it’s best to keep searching or at least investigate further to make sure the charity is legitimate and has a good track record of using funds as promised.

Research Contractors: When hiring contractors for repairs or rebuilding after a disaster, thoroughly research their credentials check for licenses and certifications. Check their references, and request written contracts that outline the scope of work, timelines, and payment terms. Obtain multiple quotes and compare them to ensure fair pricing.

Safeguard Personal Information

Imagine your personal information as a valuable possession—a treasure chest filled with sensitive data about your identity, finances, and personal life. Just like you would protect a cherished treasure, it’s essential to safeguard your personal information from falling into the wrong hands.

Be cautious when sharing personal information, especially with individuals or organizations you are not familiar with. Never provide sensitive information such as Social Security numbers or financial details to unknown parties without verifying their legitimacy.

Review Insurance Policies

Review your insurance policies regularly to ensure they adequately cover the risks associated with disasters. Familiarize yourself with the claims process and document your possessions and property before a disaster occurs. Promptly report any suspicious activity or fraudulent claims to your insurance provider.

Report Suspicious Activity

If you suspect any fraudulent activity or encounter scams related to disaster relief, report them to the appropriate authorities. Contact your local law enforcement agency, state attorney general’s office, or the Federal Trade Commission (FTC) to file a complaint.

Donate only to charities with a clear disaster appeal

“The contribution request should clearly identify what disaster relief activities you are supporting,” says the BBB. “There are many possibilities such as temporary shelter, food, medical care and other emergency needs. Don’t assume what they do based solely on the group’s name.”

Choose to work with a local presence

Local organizations have a vested interest in the long-term well-being and resilience of their communities. Their focus extends beyond immediate relief efforts, emphasizing sustainable recovery and development strategies that empower the community to rebuild stronger and more resilient in the face of future disasters.

Organizations that already have boots on the ground in the disaster region are more likely to be able to provide help quickly and offer immediate relief to those who need it most, according to the BBB Wise Giving Alliance. Local organizations have pre-existing networks and partnerships within the community. These connections facilitate collaboration with other local entities, including businesses, government agencies, and volunteers, to pool resources and coordinate efforts for a more comprehensive and efficient recovery.

Stick with familiar charities and organizations

Larger, internationally well-known organizations also play a vital role in post-disaster recovery efforts. These organizations often have extensive experience, resources, and global reach, enabling them to provide significant support in the wake of a disaster. Their established reputation can instill confidence in donors and affected communities alike. With their expertise in disaster response and recovery, these organizations can contribute to the immediate relief efforts, infrastructure rehabilitation, and long-term development projects. Their broad network and funding capacity can help accelerate the recovery process and bring much-needed aid to communities impacted by natural disasters.

The American Red Cross and Habitat for Humanity International are usually there offering support, comfort and financial assistance to disaster victims. You know that the Red Cross and Habitat, have an excellent reputation, are ones you can trust. The same goes for other well-known organizations and charities that have stood the test of time and public scrutiny.

These organizations, among others, collaborate with local communities, government agencies, and other stakeholders to facilitate comprehensive and sustainable post-disaster rebuilding efforts. If you are looking to donate or need help, connect with relief organizations that have a proven track record.

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Be wary of Door-to-door contractors

He assures you, “I can make all of this fallen tree disappear today for $1,000.” It’s tempting, but you decide to be cautious and check with the city first. After all, you’ve heard that if the tree roots are within nine feet of the street, it’s the city’s responsibility to remove them.

There are plenty of reputable door-to-door contractors, but the very nature of this sales method can bring out some shady characters. Don’t let eagerness to get repairs done get in the way of good sense. Ask to see any contractor’s or salesperson’s credentials right off the bat.

“Many municipalities require a solicitation permit if sales people go door-to-door. Ask for identification,” advises the BBB. “Check their vehicle for a business name, phone number, and license plates for your state or province.”

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High-pressure sales tactics are a big red flag

The contractor confidently tells you, “They don’t handle that. It’s your responsibility as a homeowner. And if they do take care of it, be prepared to wait for months.”

Storm-chasing scammers like to tell potential victims that the “great deal” they’re offering is only good if you hire them on the spot. If someone tries that or a similar high-pressure sales tactic, tell them to take that toolbelt and all their big promises elsewhere.

“Be proactive in selecting a contractor and not reactive to sales calls on the phone or door-to-door pitches,” advises the BBB. “Disaster victims should never feel forced to make a hasty decision or to choose an unknown contractor.”

“Inspectors” that create their own damage

Of course, a contractor must inspect your roof or other damaged areas of your house before offering an estimate for repairs. Still, keep in mind that there are unethical contractors who ask to inspect out-of-your-sight areas, only to create their own “damage” so you’ll hire them to make repairs, says the BBB.

Out-of-sight areas to proceed with caution include roofs, attics, crawl spaces, ducts and other places that you can’t easily access or see for yourself, says the BBB.

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Contractors asking for rights to your insurance claims

Get an invoice from the contractor you use and pay them directly, preferably with a credit card, which offers better fraud protection than other payment methods.

“Don’t sign any documents that give the contractor any rights to your insurance claims,” warns the BBB. “If you have questions, contact your insurance company or agent.”

Use a credit card

Charging your donation to a credit card rather than a debit card is safer since most credit card companies have zero fraud liability policies. Never donate to a charity that requests a wire transfer or gift cards as payment, warns the FBI. After donating, continue to monitor your credit card accounts to make sure additional charges aren’t added by the charity.

Be careful with crowdfunding

Before donating to appeals on crowdfunding sites such as Go Fund Me, make sure the site has policies and procedures in place to vet postings after a disaster.

“Some crowdfunding sites take measures to vet postings after a disaster, others don’t. Review the site’s policies and procedures to find out,” advises the BBB Wise Giving Alliance. “If in doubt, it is always safest to donate to people who you personally know and trust.”

Donate more than once

If you can afford to donate more than once, the need will be there, according to the Federal Emergency Management Agency (FEMA): “Recovery lasts a lot longer than media attention. There will be volunteer and donation needs for many months, even years, to come.”

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How to Recover from Disaster Fraud

Recovering from the aftermath of disaster fraud can be challenging, but there are steps individuals can take to rebuild and move forward:

  1. Document Everything: Keep detailed records of all interactions, contracts, payments, and communications related to the fraudulent activity. These records will be essential for legal proceedings and insurance claims.
  2. Contact Authorities: Report the fraud to local law enforcement agencies, providing them with all relevant evidence and documentation. This helps law enforcement investigate and take appropriate action against the perpetrators.
  3. Seek Legal Assistance: Consult with an attorney experienced in fraud cases. They can guide you through the legal process, help you understand your rights, and pursue appropriate legal action against the fraudsters.
  4. Rebuild and Move Forward: Focus on rebuilding your life and recovering from the disaster. Seek support from community organizations, counseling services, or support groups to help you navigate the emotional and financial challenges.

Now, with tornadoes, hurricanes, and floods wreaking havoc in various parts of the country, it’s crucial to be vigilant. The Better Business Bureau (BBB) warns us to watch out for scammers disguised as contractors, claiming they can solve our storm-damage problems.

Disaster fraud poses a significant threat to the recovery efforts of affected communities. By understanding the various types of fraud, recognizing the signs, and taking preventive measures, individuals can protect themselves from falling victim to fraudsters. Additionally, promptly reporting suspicious activities and seeking legal assistance can contribute to holding the perpetrators accountable and promoting a safer and more resilient society.


What are some red flags of disaster fraud?

Red flags of disaster fraud include demands for upfront payments, lack of proper licensing or documentation, suspicious behavior or misrepresentation, and unverified charities or contractors.

How can I protect myself from contractor fraud?

To protect yourself from contractor fraud, conduct thorough research, obtain written contracts, verify licenses and certifications, request references, and be cautious of high-pressure tactics or unrealistic promises.

Are there any resources available for disaster fraud victims?

Yes, victims of disaster fraud can seek assistance from local law enforcement agencies, FEMA, the NCDF, and legal professionals specializing in fraud cases. Support groups and community organizations can also provide guidance and support.

Can disaster fraud perpetrators be prosecuted?

Yes, disaster fraud perpetrators can face legal consequences. Depending on the severity of the fraud, they may be subject to fines, imprisonment, or other penalties.

What should I do if I suspect disaster fraud?

If you suspect disaster fraud, report it immediately to the appropriate authorities, such as local law enforcement agencies, FEMA, or the NCDF. Provide them with as much information and evidence as possible to aid their investigation.

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