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How Your Business Can Avoid Disaster Scams

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How Your Business Can Avoid Disaster Scams

As the saying goes, “Everything’s bigger in Texas,” and unfortunately, that includes the cleanup efforts after Harvey. With the waters receding, many people are still left wondering how to even start picking up the pieces. If you’re a business owner, you not only have to worry about repairing your home, but also your commercial property – your livelihood. And while you are making a plan to get back into business, an unfortunate number of people with less noble aims are looking for ways to take advantage of you. A whole host of disaster scams are associated with natural disaster recovery and you must be diligent to avoid disaster fraud after Harvey.

How scammers work

When a business is in the midst of cleaning up after a disaster, unscrupulous crooks know that opportunities await. Business owners are desperate to get work completed and, because of the amount of cleanup and repairs needed, local contractors often are overwhelmed by demand.

Within days of a disaster, out-of-state contractors (and those who just call themselves contractors) will begin showing up. They’ll post signs in public places advertising their services and their cell phone numbers, or they’ll go door-to-door.

Typically, they’ll offer to do the work for a certain price, and then ask for a portion of the cost up front — in cash. With money in hand, they’ll say they need to get tools or supplies, and then disappear — forever.

Here are steps to take to avoid disaster scams.

  1. Work only with licensed and insured contractors. Ask for proof of insurance.
  2. Get more than one estimate. Don’t be pushed into signing a contract right away.
  3. Get everything in writing; the cost of the work and work schedule.
  4. Require references and check them out.
  5. Request to see a driver’s license for salespeople. Write down license plate numbers and description of persons and vehicles.
  6. Never sign a blank contract.
  7. Never pay a contractor in full or sign a completion certificate until the work is completed.
  8. Insurance fraud is a felony. Don’t file a fraudulent insurance claim or misrepresent damages.

If you suspect fraud, contact the FEMA Disaster Fraud Hotline at 866-720-5721 or report it to the Federal Trade Commission.

More information on disaster-related fraud is available at the Texas Attorney General’s Office website or call 1-800-252-8011.

Watch out for price gouging, too. For price-gouging complaints, call the Consumer Protection Hotline at 800-621-0508 or send your concerns through to a dedicated e-mail address.

Even if your business needs urgent repairs, take the time to find a reputable contractor and insist on a written contract. Remember that you have the right to cancel a contract within three days if you change your mind about the scope of work being completed. Protect yourself further by paying with a check or credit card—never cash—and never make a full payment until all the work has been completed to your satisfaction.

 

 

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