Recovering and rebuilding after a disaster: Part 2 – Avoiding scams

This article is part of a series of seven articles to help businesses recover and rebuild after a disaster. Other documents in this series:

While there are always many well-meaning individuals, groups and businesses that want to assist families, companies and communities following a disaster, there are also those who want to prey on people who have just been through a major disaster with illegitimate get-rich quick schemes.

First rule of thumb: If you suspect anyone of fraudulent activities, call the Missouri Attorney General’s Consumer Protection Office at 800-392-8222 (email or call your local law enforcement agency.Open for business

Here are some tips to help you spot fraudulent activity:

  • FEMA does not charge fees to apply for assistance or to receive it.
  • Neither FEMA nor the SBA charges for property damage inspections.
  • FEMA does not ask for your Social Security number, bank account number or other sensitive information.
  • Government workers will never ask you for a fee or payment of any kind. Look for photos IDs. Be wary of anyone who says he represents a governmental agency and asks for money.
  • If you’re unsure about the authenticity of a FEMA or SBA representative, call the FEMA disaster assistance hotline at 800-621-FEMA (3362).
  • Do not be pressured into contracting or donating by anyone. Reputable organizations will honor your request to take time in making a decision.
  • Guard your Social Security number, account numbers, PINs and other personal information carefully. Identity theft can be a serious problem in the midst of the confusion following a disaster.

Arranging for repairs

  • Do not allow a contractor, utility company or inspector onto your property without verifying their identity.
  • Be wary of anyone who promises you he can speed up the clean-up, repair, insurance, building permit or disaster assistance process.
  • Be wary of anyone going door to door through a disaster area in an unmarked vehicle.
  • To avoid price gouging, get three written estimates for repair work. If you have any doubts about the credibility of the contractor with whom you are dealing, call the local Better Business Bureau or chamber of commerce.
  • Ask for references, and call them.
  • Ask for proof of insurance, such as liability or worker’s compensation.
  • Be cautious of contractors who claim to be state or FEMA certified. Neither the state nor FEMA certifies or endorses contractors.
  • Before work begins, make sure you get a written contract detailing all the work to be performed, the costs, a projected completion date and how to negotiate changes and settle disputes. Do not make your final payment until all of the work is completed to your satisfaction.
  • It may take a bit longer for your insurance carrier to settle your claim after a major disaster. If you have questions, call the Missouri Department of Insurance at 573-751-4126 or the department’s insurance consumer hotline at 800-726-7390.
  • Make sure the contract clearly states who will obtain the necessary permits. Consider having a lawyer review the contract if substantial costs are involved. Keep a copy of the signed contract.
  • If the contractor provides any guarantees, they should be written into the contract clearly, stating what is guaranteed, who is responsible for the guarantee and how long the guarantee is valid.
  • Pay only by check or credit card. A reasonable down payment (no more than one-third of the total cost) may be required to buy materials for some projects, but don’t pay anything without a signed contract.

Donations to charities

  • Use caution when approached for donations to relief organizations. Only contribute to those groups willing to provide written information about their activities.
  • Avoid cash donations. Make checks payable to the organization — not the individual.
  • Do not respond to telemarketer requests for donations.
  • If in doubt, contact the organization soliciting the donation, and ask if the person with whom you spoke is truly an employee or volunteer.
  • A great resource for checking into the legitimacy of a non-profit organization, go to