Fraud in the Aftermath of a Disaster

Every year natural and man-made disasters strike the country.  Hurricanes, floods, and tornados are just some of the disasters we experience.  At the same time relief efforts from public and private sectors pour into affected areas, unscrupulous individuals try to take advantage of the circumstances.

In 2005 during the aftermath of Hurricane Katrina, billions of U.S. Dollars of federal relief went into the Gulf Coast area. Although these funds were intended to help victims of Hurricane Katrina, dishonest people took advantage of victims through various fraud schemes. As a result, the U.S. Department of Justice (DOJ), and other law enforcement and regulatory agencies created the National Center for Disaster Fraud (NCDF) under the DOJ’s Criminal Division. Since 2005, the NCDF works as a coordinating agency working 24/7 through a national telephone hotline and email service with headquarters at Louisiana State University in Baton Rouge, Louisiana. The NCDF receives disaster fraud complaints and provides information to the public on fraud related to natural and man-made disasters.  The center’s mission seeks to improve detection, prevention, investigation, and prosecution of fraud related to these kinds of disasters as well as to serve as an advocate for the victims of such fraud.[1]

According to the DOJ, some examples of fraudulent schemes reported to the NCDF are:[2]

• Impersonation of federal law enforcement officials: Victims mainly complained about receiving robocalls pretending to be from the Federal Emergency Management Agency (FEMA), notifying victims that their flood insurance premiums were due and seeking payment from them.  In another reported scam, FEMA impersonators calling victims and requesting personal information leading to identity theft.
• Identity Theft: Described above, fraudsters impersonate officials or law enforcement to steal personal information and then filing claims for FEMA assistance or other relief benefits.  Victims of identity theft then discover when filing for benefits, someone else had already filed under their name.
• Fictitious charities: People pretending to be from a charity soliciting donations for disaster victims through social media, emails, mail, phone calls, or door-to-door.
• Contractor and debris removal fraud: Fraudsters pretending to be repair or debris clean-up contractors ask for cash advances and never showing up for work, leave work unfinished, or use substandard materials not up to code.
• Price gouging: Refers to price increases on essential goods and supplies in a disaster area by those who want to take advantage of scarcity and need.

The following are steps you can take to prevent becoming a victim of fraud during or after a disaster:

• Before you donate to a charity: [3]
  • Check out the charity organization with the Better Business Bureau’s (BBB) Wise Giving Alliance at http://give.org/;  Charity Navigator https://www.charitynavigator.org/; Charity Watch https://www.charitywatch.org/home; or GuideStar http://www.guidestar.org/
  • Research the organization and find out if the charity is registered in your state at the National Association of State Charity Officials at http://www.nasconet.org/
  • Donate to charities you know as legitimate.
  • Pay with credit card or check, not cash or gift cards and ask for a receipt with the charity’s name, address, and phone number. You will then have a record of your donation.
  • If you think you have been victim of a charity scam, report it to the Federal Trade Commission (FTC) at https://www.ftc.gov/complaint

• Be suspicious of any phone calls, emails, texts, or in-person solicitation from someone claiming to represent a government agency asking for money.  Verify the person is legitimate by calling directly to the agency.  If contacted in person, make sure they have proper photo identification or a badge. Do not give out any personal information if in doubt or until you have verified credentials. Remember there is no fee required to apply for or to get assistance from FEMA, the U.S. Small Business Administration (SBA), or your state government.  Contact FEMA’s Office of the Chief Security Officer (OSCO) Tip line: FEMA-OCSO-Tipline@fema.dhs.gov

• If you suspect or have been victim of any kind of fraud during or after a disaster, contact the NCDF’s Disaster Fraud Hotline by phone, email disaster@leo.gov, or go to their website for more information: https://www.justice.gov/disaster-fraud

• If you are a victim of identity theft, contact the Federal Trade Commission hotline.

• If hiring contractors:
  • Do not give your Social Security number or bank information to contractors.
  • Use only contractors licensed by your state and get more than one written estimate.
  • Ask for proof of insurance and ask for references.
  • Make final payments only after work is completed.
  • Never sign contracts with blanks not filled in.
  • Pay by check or credit card.

 

[1] U. S. Department of Justice (DOJ). National Center for Disaster Fraud (NCDF) website.  Retrieved on December 12, 2018 from https://www.justice.gov/disaster-fraud
[2] Ibid., U. S. Attorney’s Office. (2018, October 19). In the aftermath of Hurricane Michael Department of Justice Reminds the Public to be Aware of Fraud and Report it to the National Center for Disaster Fraud. Retrieved on December 12, 2018 from https://www.justice.gov/usao-mdfl/pr/aftermath-hurricane-michael-department-justice-reminds-public-be-aware-fraud-and-report
[3] Tressler, C.  (2017, August 28). Wise giving in the wake of Hurricane Harvey [Wev log post]. Retrieved December 13, 2018 from https://www.consumer.ftc.gov/blog/2017/08/wise-giving-wake-hurricane-harvey