FEMA Looking Out for Fraud during Minnesota Recovery
Release Date: September 11, 2007
Release Number: 1717-020
» More Information on Minnesota Severe Storms and Flooding
ROCHESTER, Minn. -- Residents of southeastern Minnesota affected by recent severe storms and flooding are urged to be alert for and report potential fraud during recovery and rebuilding efforts, according to officials from Minnesota Homeland Security and Emergency Management (HSEM) and the U.S Department of Homeland Security's Federal Emergency Management Agency (FEMA).
"The vast majority of contractors and individuals involved in disaster recovery operations are honest and intent on helping out," said Federal Coordinating Officer Carlos Mitchell. "Unfortunately, there is always the chance that unscrupulous individuals will try to take advantage of others' misfortunes, so we advise disaster victims to be aware and alert while rebuilding."
Those who suspect anyone - a contractor, inspector, disaster victim or someone posing as any of these - of committing fraudulent activities should call the FEMA Fraud Hotline at 1-866-720-5721 (The recorded message will cite hurricane fraud, but any FEMA-related fraud may be reported at this number.).
To safeguard against disaster-related fraud, officials recommend the following precautions:
- Ask for ID. If someone represents themselves as a federal employee, such as an inspector, but does not produce identification, residents are urged to ask to see it. A FEMA or U.S. Small Business Administration shirt or jacket is not absolute proof of someone's affiliation with the government. Federal employees carry official photo identification and applicants may receive a visit from more than one inspector or verifier.
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Safeguard personal information. Do not give personal information such as social security and bank account numbers to individuals claiming to be affiliated with the federal government. FEMA inspectors never require this information. A social security or bank account number is requested during the first phone call to the agency's registration line. On any follow-up calls a FEMA representative may ask for the last four digits of your social security number.
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Under no circumstances are FEMA or SBA representatives allowed to accept money. If someone claiming to be a federal employee or federal contractor attempts to collect money for their help, report the person and their vehicle number to your local police department.
- FEMA inspectors verify damage, but do not hire or endorse specific contractors to fix homes or recommend repairs.
Use care when hiring contractors
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Do research on contractors. To check on a contractor's licensing status in Minnesota, consumers can go to https://www.egov.state.mn.us/Commerce/license_lookup.do?action=lookupForm. 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.
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Ask for proof of insurance. If a contractor is uninsured, you may be liable for accidents on the property. Make sure the contractor has disability and workers' compensation insurance.
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Get it in writing. Ask for a written estimate and check to make sure it includes all the 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, including all tasks to be performed as well as associated costs, a timeline and payment schedule and who is responsible for applying for necessary permits and licenses. Never sign a blank contract.
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Ask for a written guarantee. It should state what is guaranteed, who is responsible and how long the guarantee is valid.
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Do not make advance payment in cash. Pay by check in order to keep a record and avoid double charges.
Use disaster funds for their intended purpose
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False disaster claims or theft of government property, prosecuted by the Justice Department, are felonies carrying maximum penalties of 10 years imprisonment or a $250,000 fine - or both. FEMA's Office of Inspector General routinely audits individuals, state and local governments and nonprofit organizations that receive FEMA disaster-recovery funds. The audits are independent assessments to determine whether recipients spent the funds according to federal regulations and FEMA guidelines. Usually audits question expenditures for ineligible items or instances of duplicate payments from insurance companies or other sources.
FEMA coordinates the federal government's role in preparing for, preventing, mitigating the effects of, responding to, and recovering from all domestic disasters, whether natural or man-made, including acts of terror.
Last Modified: Tuesday, 11-Sep-2007 11:21:52