New Contractor Fraud Schemes On The Rise
Release Date: September 21, 2004
Release Number: 1539-131
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ORLANDO, Fla. -- The Federal Emergency Management Agency (FEMA) cautions victims of Hurricanes Charley, Frances and Ivan to continue to look out for an increase number of scam artists pretending to be employed by FEMA or other government agencies, such as the U.S. Small Business Administration (SBA).
“Consumers should keep in mind that a FEMA or SBA shirt or jacket is not absolute proof of someone’s affiliation with these agencies,” said Federal Coordinating Officer Bill Carwile. “The best way to verify authorized FEMA or SBA personnel is by checking their laminated photo identification card, which they are required to wear at all times.”
One fraudulent scheme involves con artists going door-to-door to damaged homes, or phoning victims, and soliciting personal information such as social security and bank account numbers. Consumers should know that FEMA inspectors never require this information. A social security or bank account number is requested during the first phone call to the agency’s teleregistration line. On any follow-up calls, a FEMA representative may ask for the last four digits of your social security number.
The agency has also received reports of scammers telling homeowners they need to pay $1,500 to be put on a list to get their home repaired. Other reports have surfaced of persons pretending to be from the SBA and offering to fill out disaster loan applications for a $50 fee.
Consumers should remember that under no circumstances are FEMA or SBA representatives allowed to accept money. FEMA inspectors assess damage but do not hire or endorse specific contractors to fix homes or recommend repairs.
Other points to keep in mind to avoid becoming a fraud victim:
- To check on a contractor’s licensing status in the state of Florida, consumers can go to www.myfloridalicense.com. You may also check with the local Better Business Bureau, homebuilders; association or trade council to see if the contracting firm has any unanswered complaints against it.
- Be suspicious of anyone who offers to increase the amount of your disaster damage assessment.
- Ask for proof of insurance. If a contractor is uninsured, you may be liable for accidents on your property. Make sure the contractor has both disability and worker’s compensation insurance.
- Ask for a written estimate and check to make sure it includes all work you expect to have done, as well as taxes and other fees. Keep in mind that some contractors charge for an estimate.
- Once you decide to use a particular contractor, ask for a written contract that includes all tasks to be performed as well as associated costs; a timeline and payment schedule; and who is responsible for necessary permits and licenses. Never sign a blank contract.
- Do not give anyone an advance cash payment. Pay by check in order to keep a record and avoid double charges.
- Legitimate contractors normally do not require more than one-third of the total charges as a down payment.
- Ask for a written guarantee hat states what is covered, who is responsible and how long the guarantee is valid.
- If you feel uncomfortable about a contract and have already signed it, cancel it quickly. You may cancel a contract within three business days after signing. Be sure to follow the contract cancellation clause procedures.
If you think you have been victimized by fraud or suspect fraudulent activity, please report it to the State Attorney General’s office at 1-866-966-7226.
The State Emergency Response Team (SERT) is a collaboration of Florida’s emergency management agencies led by the state coordinating officer. SERT’s mission is to ensure that Florida is prepared to respond to emergencies, recover from them, and mitigate their impact. Visit http://www.floridadisaster.org for the latest information on the hurricane relief efforts.
On March 1, 2003, FEMA became part of the U.S. Department of Homeland Security. FEMA's continuing mission within the new department is to lead the effort to prepare the nation for all hazards and effectively manage federal response and recovery efforts following any national incident. FEMA also initiates proactive mitigation activities, trains first responders, and manages the National Flood Insurance Program and the U.S. Fire Administration.
Last Modified: Tuesday, 21-Sep-2004 10:05:46