FTC Warns Consumers: Charity and Home Repair Scams May Appear After a Disaster

As posted on May 27, 2011 on www.ftc.gov

After flooding along the Mississippi River and tornadoes in the southeast and midwest, the Federal Trade Commission reminds consumers that scams often follow disasters. The nation’s consumer protection agency warns consumers about urgent appeals for charitable donations, and cautions residents in stricken areas about fraudulent home repair offers.

Insurance settlements and other relief are crucial for homeowners and businesses, but these funds also attract criminals. If you are asked in person, by phone, e-mail or postal mail to make a donation, consider these tips about giving wisely:

  • Donate to charities you know and trust. Be alert for charities that seem to have sprung up overnight.
  • If you’re solicited for a donation, ask if the caller is a paid fundraiser, who they work for, and the percentage of your donation that will go to the charity and to the fundraiser. If you don’t get a clear answer — or if you don’t like the answer you get — consider donating to a different organization.
  • Do not give out personal or financial information – including your credit card or bank account number – unless you know the charity is reputable.
  • Never send cash: you can’t be sure the organization will receive your donation.
  • Check out a charity before you donate. Contact the Better Business Bureau’s Wise Giving Alliance at www.give.org.

Fraudsters aim at disaster-affected areas, hoping to cash in on property owners’ insurance settlements and federal government relief. Home and business owners who are considering whether to hire a contractor should:

  • Ask for copies of the contractor’s general liability and worker’s compensation insurance.
  • Check the contractor’s identification and references.
  • Avoid paying more than the minimum in advance.
  • Deal with reputable people in your community.
  • Call local law enforcement and the Better Business Bureau if you suspect a con.

For more information, see Disaster Recovery, Charity Fraud, Charity Checklist, and Charitable Donations: Give or Take?