Surge of disaster scams often follow severe storms, agencies warn

Oct. 14 (UPI) -- Several federal agencies and non-governmental organizations have raised a red flag warning against a surge of scams and fraud in the wake of hurricanes Helene and Milton.

Storm season is fraud season, and widespread natural disasters and other events create opportunities for fraudsters who seek to victimize the victims of disasters a second time.

Hurricanes, wildfires and tornadoes create opportunities for scammers to commit fraud due to the high demand and immediate need for rebuilding, according to the Federal Trade Commission.

Scammers might solicit funds for charities with which they have no connection, seek up-front payments for work they don't intend to do or use substandard materials and shoddy work that don't hold up over time.

The FTC says there are common signs of scammers of which consumers and disaster victims should be aware.

Those include scammers saying they don't need to be licensed to do the needed work, asking property owners to sign blank contracts or suggesting disaster victims obtain loans from lenders the scammers claim to know.

Fraudsters also might request up-front payments by wire transfers, gift cards, payment apps, cryptocurrency or cash or claim to help disaster victims obtain Federal Emergency Management Agency funding for a fee.

Because natural disasters occur every year, fraudsters have continual opportunities to rip off consumers and disaster victims.

"Last year was a historic year for billion-dollar weather and climate disasters in the United States, with 28 separate events costing at least $1 billion [each] and totaling more than $93 billion in catastrophe losses," Nicholas Zeitlinger of the National Insurance Crime Bureau told UPI in an email.

"Our estimate is that about 10%, or $9.3 billion, is lost to post-disaster fraud," Zeitlinger said.

Property owners must beware of fraudulent contractors, experts wan.

With Hurricane Helene inflicting widespread destruction across the southeaster United States, Hurricane Milton inflicting additional damage in Florida and the potential for more tropical storms making landfall this year, the crime agency says property owners must be the first line of defense against fraud.

It offers four tips for homeowners to help thwart fraud when rebuilding after hurricanes Helen, Milton or any disaster.

The first is to contact their respective insurers before signing any agreements with contractors to rebuild. Insurers typically have lists of locally authorized contractors known to do quality work at a fair market price.

The agency says property owners should ensure they fully understand all documents that are related to their insurance claims, including the scope of work covered, policy limits and any potential coverage exclusions.

Property owners also should be wary if asked to agree to an assignment of benefits to a contractor. Doing so might put insurance money for rebuilding into the account of a fraudster without any work being done.

The second tip for property owners is to verify all contractors to ensure they are legitimate, licensed and bonded to do work in respective states.

Seeking references from trusted sources, such a friends, family members and co-workers, can help locate locally reputable contractors.

When discussing potential work with a contractor, homeowners should ask contractors for references and for their driver's licenses, and record the numbers and a license plate number on vehicles used by contractors.

If a contractor has an out-of-state driver's license or plate on a vehicles, that increases the potential for fraud.

A third tip is to not allow contractors to use pressure tactics to immediately sign work contracts.

Any work agreements should be in writing and include detailed information regarding the scope of work, costs, timelines and payments to be made.

It's especially important to never sign work contracts that have blank spaces, which fraudsters could use to add information to which you never agreed.

Homeowners also never should pay full amounts in advance or sign a certificate of completion until all work is done in a satisfactory manner.

The fourth tip is to never share personal information over the phone with callers who say they represent an insurer.

Personal information should be shared only after verifying the identities of those asking for it, and insurers won't ask property owners to pay deductibles in advance or over the phone.

Many scammers pose as representatives of charitable organizations.

The Red Cross, for example, is one organization for which fraudsters impersonate one of its representatives while soliciting donations that never go to the charitable organization or helps people with disaster relief.

The Red Cross says several known scams that invoke its name.

One common scam is when a caller claims to represent a federal agency offering disaster assistance grant money, but the phone number that appears on the caller ID is for the Red Cross switchboard.

"Red Cross employees and volunteers will never solicit or accept money," Red Cross media relations lead Stephanie Fox told UPI in an email.

Fox advises people beware of visits, calls or emails from people claiming to offer financial assistance, asking for social security numbers, bank account or other personally sensitive information, which could lesssad to identity theft.

Many scammers also send emails that might have a return address listed as "redcross.net," which is not a Red Cross email.

The message might thank the recipient for donating to the Red Cross for hurricane relief and claim that the credit card on file has been charged.

The email message also advises the recipient to go to a scammer's website to "unauthorize the charge," which requires providing personal information and the credit card information.

When scammers obtain people's personal and credit card information, they can make unauthorized charges.

Other scams done in the name of the Red Cross include contacting people and falsely claiming a family member volunteering with the relief agency has been arrested in Haiti or another locale and requesting assistance to secure that person's release.

Fox advises people to research charities through Charity Navigator, Charity Watch Group, the Better Business Bureau and GuideStar before donating.

Anyone who suspects they have been contacted regarding disaster-related fraud can call the National Center for Disaster Fraud toll-free at 866-720-5721 or sending and email to disaster@leo.gov to report the incident.

All calls and emails are treated as confidential.