Post-Disaster Contractor Fraud

One of the most devastating things that can happen to a family is to be the victim of a disaster.  Whether your home has been damaged by a major hurricane, a tornado, a fire or a flood, your immediate reaction is to try to get things back to normal as quickly as possible.  Because of this impulse, many people fall victim to contractor fraud after every major disaster. Unscrupulous criminals, often called storm-chasers, turn up after natural disasters, collect upfront deposits and disappear.  After everything else that has happened to the homeowner, this final insult can be devasting.

How to Avoid Being a Victim of Construction Fraud

If you are a victim of a natural disaster, you do not have to fall victim a second time to a dishonest contractor.  Here are a few steps that insurance companies suggest you take in order to protect yourself:

Have your insurance company assess the damage.
Ask your insurance company for a list of approved contractors.
Get a list of licensed contractors from your state licensing agency at NASCLA.org.
Check out the company with the Better Business Bureau at bbb.org.
Ask to see the contractor's license, workers comp insurance policy, driver's license and, perhaps, a performance bond.
Get the estimate, completion date, and list of materials and prices in writing on the company letterhead.
Check back with your insurance company if a contractor says you have damage that the insurance adjuster did not notice.  They could be trying to exaggerate the work you need.  Even if they are not, you want to make sure the insurance company will cover the repairs.
Do not pay a deposit larger than 25 percent of the estimate, and don't pay that until the contractor has the materials and is ready to start work.
TAKE YOUR TIME before choosing a contractor.  Make sure you have taken all the steps listed above. Be suspicious if a contractor shows up at your door or if they do not have a business card, a physical address or anything else that causes you to question whether or not they have a legitimate business.  You should also be suspicious if one estimate is substantially less than the other estimates.  They may not be using quality materials.

There are many people who suffered financial and emotional damage as a result of Hurricane Katrina fraud.  Although there are many honest, helpful contractors, everyone should be aware that contractor scams still occur.  Disaster fraud is devasting, but you do not have to let it happen to you.

You may also be interested in reading:

How to Tell When Someone is Lying
The Government Will Not Pay Your Utility Bills
The Scam the Promises to Fix Your Credit

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