What is a Hurricane Scam? What Every Floridian Should Know
We’re right in the middle of hurricane season, and while Florida hasn’t suffered a devastating storm so far this year, we Floridians know it’s likely just a matter of time. Fourteen named storms are expected this season, which means there’s eleven to go following Alberto, Beryl, and Chris. That means it’s also going to be a busy season for scam artists looking to make a quick buck from storm victims and those wanting to help. “We’ve seen it after every significant disaster, and we don’t expect anything different [now],” says Frank Scafidi, spokesman for the nonprofit National Insurance Crime Bureau. Here are five scams to be aware of before a hurricane hits.
1. Asking for repair payments upfront
The Better Business Bureau reports that this is the most common type of scam when dealing with contractors in the aftermath of a storm. It may sound legitimate: a contractor explaining that he or she needs a large percentage of the payment in advance to cover the costs of supplies and equipment. However, some contractors have been known to vanish once they’ve received their upfront payment or perform substandard work. To protect yourself, a good rule of thumb is to not pay any money before the work is done; if you do, a reputable contractor should never ask for more than $1,000 or 10% of the total job. Accept no verbal offers; instead, get a written contract detailing the work that will be done, the materials that will be used, and the price of labor and materials; If you can afford to wait for repairs to begin, it’s also a good idea to get at least three bids from companies you’ve investigated to make sure they are legitimate. And always beware of anyone who knocks on your door after a storm and offers his or her services; this is not how reputable contractors get new business.
2. Misusing an Assignment of Benefits contract
An Assignment of Benefits (AOB) is a document that gives a third party the power to act on behalf of an insurance policyholder; basically, the AOB lets them “stand in for” the insured and seek direct payment from the insurance company. According to the Florida Office of Insurance Regulation (OIR), this document can be given to a number of contractors, such as a water extraction company, roofer, or plumber. It has become prevalent in water and roof claims in the Sunshine State and others. But while this may sound like a way to simplify the repair process and save time, it could also be a scam. Once you assign your AOB to a contractor, that person will have knowledge of how much your insurance is willing to pay for particular repairs. This can result in more frequent and severe claims as unscrupulous contractors pad their bills. A 2016 OIR study found that claims using an AOB have a much higher severity rate than claims without one, and the frequency and severity of water claims have risen since 2010. Frequency increased by 46% and severity by 28%.
3. Fake victim relief funds
Social media can be used for good and bad, and scammers have learned how to use it for the latter, creating phony victim funds; all it takes is a Facebook or Twitter page with a “charity” link to bilk do-gooders out of their money by infecting their computer with a malware download. Another tactic scammers use is phishing emails which show up in your inbox asking for donations. To be safe, never click on any links in emails or text messages from someone you don’t know (you should also be cautious of suspicious links from someone you do know as their email may have been hacked). Of course, we’re not trying to dissuade you from helping others; if you want to donate, visit the charity’s website directly by typing in the charity’s name in a browser instead of a link provided in an email. You can also help others non-financially by reporting any suspicious links or charities to the BBB’s Scam Tracker.
4. Robocalls telling storm victims to pay up
When disaster strikes, there are always heart-warming stories of complete strangers helping victims. That doesn’t mean you should let your guard down! A new scam involves robocalls telling storm victims that their insurance premiums are late and if they don’t send money immediately their homeowners and flood insurance will be canceled. “That is pure fraud. You should only be taking information from trusted sources,” Roy E. Wright, director of FEMA’s National Flood Insurance Program. If you receive one of these robocalls, hang up and contact your insurance agent directly regarding payments of premiums.
5. Bogus FEMA job posts
FEMA also warns of fake job offers circulating on social media in the aftermath of a storm. The post will state that FEMA is hiring approximately 1,000 people and offering $2,000 a week for 90 days. In an effort to appear legitimate, the post will mention that those with felonies will not be considered, and an 888 phone number is usually included. It can be confusing, because often FEMA is hiring field inspectors following storms. However, FEMA says that this offer is always a fraud and that anyone who wants to work for the agency should visit the official website.
It’s truly sad that today, scammers are taking advantage of storm victims who’ve possibly lost everything, including loved ones. With more than three months to go this hurricane season, the team at Lowman Law Firm wanted to keep our fellow Floridians aware of these scams so you can remain vigilant. Don’t let them make a bad situation worse.