How To Avoid Scams After Weather Emergencies and Natural Disasters

How To Recognize the Signs of a Scam

Scammers can be very convincing. While storms and disasters are unpredictable, there are ways to spot the tactics these scammers use. Recognizing these common signs of a scam could help you avoid one.

• Scammers claim they don’t need to be licensed to do the work.
• Scammers say you’ll get a discount, but only if you sign a contract right away.
• Scammers tell you to sign over your insurance check.
• Scammers ask you to pay for everything up front.
• Scammers insist you pay by wire transfer, gift card, payment app, cryptocurrency or in cash.
• Scammers ask you to sign a “blank contract.”
• Scammers suggest you borrow money from a lender they know.
• Scammers claim they can help you qualify for FEMA relief ― for a fee.

How To Avoid a Scam

As you focus on cleaning up, rebuilding, and getting back on track, here are some ways to avoid a scam.

• Know that FEMA doesn’t charge application fees. If someone wants money to help you qualify for FEMA funds, it’s a scam.
• Verify your insurance coverage. Don’t rely on a contractor to tell you what’s covered, and never sign your insurance check over to a contractor. Instead, arrange with your bank or credit union for a Certificate of Completion. That way, the bank will pay the contractor for each stage of the job after you have given your approval.
• Be skeptical of anyone promising immediate clean-up or repairs. Unlicensed contractors and scammers often appear in recovery zones. If they want cash up front, walk away. And if they won’t give you copies of their license, insurance, or a contract in writing, that’s a red flag.
• Check out contractors before you commit to anything. 
  • Use online review sites you trust to see what others are saying. Do people seem to have similar experiences, good or bad? Also check out a contractor’s reputation by searching online for their name with words like “scam,” “review,” or “complaint.”
  • Confirm your contractor’s license and insurance. Check with your state or county government to confirm a contractor’s license, and ask the contractor for proof of insurance. Consider only contractors who are licensed and insured.
  • Check with a local home builders’ association. Find out if there are complaints against contractors you’re considering.
• Get estimates from more than one contractor. The written estimate should include a description of the work to be done, materials, completion date, the price, and the contractor’s contact information. Don’t automatically choose the lowest bidder. Ask for an explanation if there’s a big difference in price.
• Get a written contract and read it carefully. Contract requirements vary by state. Even if your state doesn’t require a written agreement, ask for one. Before you sign a contract, make sure it includes
  • the contractor’s name, address, phone, and license number (if required)
  • an estimated start and completion date
  • a payment schedule
  • any promises made during conversations or calls related to issues such as the scope of work and the cost of labor and materials
  • a written statement of your right to cancel the contract within three business days if you signed it in your home or at a location other than the seller’s permanent place of business
  • no blank spaces that someone could fill in later

How To Pay for Repairs

Whether you have insurance or not, here’s some advice to help protect yourself and your money.

• Negotiate a reasonable down payment. Some states actually limit the amount of money a contractor can ask for as a down payment. Contact your state consumer protection agency to find out what the law is in your area.
• Pay by credit card or check, never by wire transfer, gift card, payment app, cryptocurrency or in cash. Scammers ask for these types of payments because, once they’ve collected the money, it’s almost impossible for you to get it back.
• Never make the final payment until the work is done and you’re satisfied. Make sure you get invoices and receipts. Keep them for your records.

Where To Get Financial Help

Paying for home repairs is expensive even without the added stress of an emergency or disaster. But, there may be resources if you need help paying for repairs.

• FEMA disaster relief: The Federal Emergency Management Agency operates a Disaster Housing Program to help people who have been forced out of their homes by disasters. This includes Disaster Home Repair Assistance, which gives grants to people for minor but necessary disaster-related repairs. Call the FEMA Disaster Helpline at 1-800-621-FEMA.

• SBA loans: The U.S. Small Business Administration makes low-interest loans of up to $200,000 to homeowners to repair or replace their primary residence.
• Personal loans: If you decide to get a loan to pay for work, be cautious about using your home as security. If you don’t repay the loan as agreed, you could lose your home. Consider asking an attorney to review the loan documents.

How To Handle Problems

Try to resolve problems with the contractor first. Many can be resolved at this level. Follow any phone conversations with a letter you send by certified mail. Request a return receipt. That’s your proof that the contractor got your letter. Keep a copy for your files. If you can’t resolve the problem with the contractor, consider getting outside help from

• your state attorney general or local consumer protection office
• local media’s Call For Action lines
• legal services organizations

Report fraud. If you think you see a scam, report it to the FTC at ReportFraud.ftc.gov. Your report could help the FTC stop the scammers and help someone else avoid that scam.

For More Information

• FTC: Home Improvement and Dealing with Weather Emergencies
• Red Cross: Checking Your Home: Structural Elements