Last week, I visited Florida communities recovering from the devastation caused by Hurricane Michael. The SBA’s disaster assistance team is working long hours at local recovery centers, helping homeowners, renters and businesses navigate the challenges that come with financing the rebuilding of one’s home or business.
Sadly, after every major disaster, scam artists prey on people at the most vulnerable points in their lives. During my visit, disaster survivors told me stories about unscrupulous building contractors who convince people to give away their insurance proceeds without doing any construction work.
Here are a few tips from our disaster recovery partners at FEMA to keep in mind so you can protect yourself from becoming a victim of fraud:
Government employees don’t charge for recovery assistance
Federal and state workers never ask for or accept money and always carry identification badges. There is NO FEE required to apply for or to get disaster assistance from FEMA, the U.S. Small Business Administration or the state
Watch out for Price Gouging
Price gouging occurs when a supplier marks up the price of an item more than is justified by the actual costs. Disaster survivors are particularly susceptible because their needs are immediate and they have few alternatives to choose from. Notify your state’s Office of the Attorney General if you suspect a vendor of price gouging.
Dealing with Contractors
Individuals and business owners should take steps to protect themselves and avoid fraud when hiring contractors to clean property, remove debris or make repairs.
Here are a few tips:
- Don’t pay a contractor in full before work begins or is finished, and do not be pressured to endorse your insurance claim check to a contractor for repairs. Make final payments only after the work is completed and use a verified payment source (check, credit card, etc.).
- Only use contractors licensed by your state.
- Get the estimate in writing and review several contractors before deciding.
- Demand and check references and get any guarantees in writing.
- Any builders you hire should have their own general contractor liability insurance — ask to see proof. The insurance should cover any bodily injury or property damage the firm accidentally causes to you, your family, and your property.
- Insist on a written contract. Don’t sign a contract with blank spaces.
The best way to avoid fraud is to arm yourself against it by having a checklist to remind yourselves of your specific rebuilding needs and what you need to demand when hiring a contractor.
Disaster recovery resources:
Insurance Institute for Business & Home Safety – Get tips on how to how to rebuild stronger. Click on the “FORTIFIED” tab.
For information on how to apply for SBA disaster assistance, location of recovery centers, visit www.sba.gov/disaster
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