Guarding Against Disaster Assistance Fraud
Release Date: July 19, 2003
Release Number: 1474-58
» More Information on West Virginia Severe Storms, Flooding and Landslides
Charleston, WV -- When a disaster strikes, unscrupulous individuals may try to profit from the anxiety of families who suffered damages or loss and from the flurry of activity in filing claims. According to the Federal Emergency Management Agency (FEMA), problems of fraud usually involve contractors and home or business owners, or renters who file false claims.
Contractors
Contractors may approach victims and press them into having repairs done, only to perform shoddy work. "We know from experience that residents often get into disputes with repair services over the quality or cost of the work that's been done," said Stephen S. Kappa, state coordinating officer. State and federal officials advise home and business owners in West Virginia with storm-related damages to be wary:
- Try not to rush into starting repair work.
- Get estimates from more than one licensed, bonded, reputable contractor. Don't grab the first person that comes along. Check to see if the contractor is properly licensed in West Virginia by calling 1-877-558-5134. You may also use this number to call in complaints.
- Find out what neighbors are paying for similar work.
- Be wary of contractors claiming, "I can get to you right away and do it cheap."
- Write down the license plate number and driver's license number of anyone offering services.
- Ask to see proof of the necessary contractor's licenses and building permits.
- Make certain the contractor shows you a certificate of insurance covering liability and workers' compensation - otherwise, you could be liable if a worker is injured while working on your property.
- Get a contract in writing. It should cover what is to be done, when work starts, cost and payment schedules, and the quality of materials to be used.
- Make sure repairs are done according to local building codes.
- Be careful that your signature on a contractor's bid is not an authorization to begin work.
- Don't pay more than 20 percent down for the contractor to begin work. Then pay periodically, according to the progress of the work.
- If the contractor insists on payment for materials up front, then go with him to buy them or pay the supplier yourself.
- Have the contractor sign a release of lien when the work is done and paid for; this will prevent the contractor from making legal claims against your property in the event of a dispute later.
- Don't make final payment until the job is finished - and you are satisfied with it.
- Make sure all work that requires city or county inspection is officially approved in writing before making final payment to the contractor. You may even want a structural engineer to double-check major repairs before you make a final payment.
Don't sign over an insurance settlement check to the contractor.
False Claims
"Instances of fraud and abuse are often reported during disasters," said Federal Coordinating Officer Louis Botta. "We have systems in place to deal with questionable activities or outright fraud without delaying service to affected families."
Here are some examples of methods used to detect fraud:
- Claims are entered into a data system and the information is retained for verification.
- An automated system crosschecks information with other agencies and insurance companies to spot duplicate applications.
- Field inspections are conducted to verify claims for damages.
Botta said applicants who make a mistake in reporting damages or misrepresent losses will be given an opportunity to correct or cancel their claim. If you have been a victim of contractor fraud, contact your State Attorney General's Office of Consumer Protection and your local police department. For free legal assistance call 1-866-989-8227. Report false claims to the FEMA Office of the Inspector General at 1-800-323-8603. It is open 24 hours a day, seven days a week. All calls remain confidential.
Last Modified: Monday, 21-Jul-2003 08:35:22