The number of active scammers seems to multiply like cockroaches. Just when you think you have one beat, another one crawls by. There are Social Security scams, work-from-home scams, investment scams, and, now, natural disaster scams. Here's how it works and how to avoid becoming a victim.
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Advice from the Consumer Financial Protection Bureau (CFPB)
Imagine you've spent years planning for retirement. Within months of your last day of work, your area is ravaged by wildfire, hit by a hurricane, or leveled by a tornado. Someone knocks on your door, telling you they're there to help. You don't know this person from Adam, but their smiling face makes you feel slightly better.
They know you're vulnerable and unsure where to begin looking for help. You've been calling your insurance company all morning, but can't get anyone to return your call. The calm, smiling person in front of you may claim to be from a government agency or a bogus charity, say they're an experienced contractor, or come up with some other somewhat realistic story.
You're desperate for help, but also vaguely aware that you may be looking at a scammer. Here's how the CFPB says you can recognize the tricks that scammers use and spot scams more easily:
Confirm identities
Don't take them at their word if they tell you they're a contractor or law enforcement. It's not difficult for a person to get a fake uniform or pretend to be someone they're not. Anyone who is legitimately trying to help will appreciate the fact that you're protecting yourself.
Ask to see identification and call the organization they claim to work for to confirm they are who they say they are. In the meantime, don't let them into your house and keep your door locked. Tell them you'll be back after you've confirmed their identity. If they're not who they say they are, call the police. If they're a scammer, they will likely leave as you make the call.
Tell them nothing
No matter how innocent their questions may appear, never offer personal information to anyone you don't know. No one needs your Social Security number, bank routing information, credit card number, or to know whether you have a retirement annuity. No one.
Following a disaster, getting the answers you need may take days, but it's better to be inconvenienced than to lose your shirt to a scammer.
Take your time
During periods of crisis, the bad guys will push you to make a quick decision and charge as much as they dare for their services. To hurry you to sign a contract, they may say it's a "limited time deal," or promise to move you to the front of the line. Be suspicious.
The hardest thing in the world to do after a disaster is take your time. After all, if you know that every house in your neighborhood will need a contractor, you want to be first in line. Again, it's better to wait than to allow a crook to walk away with money you may need for healthcare in retirement or a vacation when this is all over.
Go ahead and be suspicious
It's better to be safe than sorry when it comes to post-disaster scams. If someone asks you to pay them via cash, wire transfer, gift card, or virtual currency (like Bitcoin), it's because they plan to steal the money and don't want you to be able to track them.
Be aware that disasters bring price-gougers out of the woodwork
Remember the pandemic and how many businesses said they had "supply chain issues?" For some, this was absolutely true. However, plenty of businesses without supply chain issues claimed that was the reason their prices increased so dramatically. And you may have noticed that many of those businesses never lowered their prices after the worst of the pandemic had passed.
Don't overpay just because you feel you must. Shopping around for a reasonable price from a legitimate contractor or business is smart. If your insurance company is ultimately footing the bill, let them help you find a dependable contractor.
Stay connected
Even if you've never met your neighbors, now is a good time to get to know them. Share stories of who you've been contacted by and get their impressions. Stay in touch with family and friends and tell them what's happening. Ask for advice when it's needed. In the meantime, sign no contracts and give no one money.
Whether someone tells you they're from FEMA, a mortgage company, or a charity, keep your antennae up. Never assume someone is telling the truth simply because they seem so honest.
All natural disasters are difficult, and the wait for legitimate help can feel endless. However, during that wait, you must be particularly vigilant to protect yourself, your assets, and your overall net worth.
