Department of Financial Institutions
Beware of After-Storm Scams
FRANKFORT, Ky. – (March 7, 2012) – This National Consumer Protection Week, it is important to beware of scams and frauds, especially in the wake of recent storm damage across the state.
Often after disasters, scams linked to charities, contractors and others seek to cash in on insurance settlements and potential financial relief from the government. The Department of Financial Institutions (DFI) reminds consumers to double check special storm damage “deals” and offers that sound too good to be true.
“Con artists pay attention to the headlines and don’t hesitate to take advantage of a terrible situation in order to scam victims in need of food, clothing and shelter,” said DFI Commissioner Charles Vice. “The best way to protect yourself is to recognize and avoid fraud.”
Common scams after a storm include the following:
Charity scams – Many people are ready to give after a storm, and scammers are ready to cash in on sympathy for victims. Only donate to charities you know and trust. Ask what percentage of the donation goes to the charity. Check out a charity with the Better Business Bureau at www.give.org.
Home improvement fraud – Self-proclaimed contractors may go door-to-door offering to help victims repair their homes or clean up debris. Or they may claim to have supplies left over from doing another job and offer to work at a “discount” to you. Be suspicious if the prices seem too good to be true or if the workers are not known in your area. Don’t pay for services until the work is complete, and always verify licensing of HVAC, electrical and plumbing contractors with the Department of Housing, Building and Construction at https://ky.joportal.com/License/Search. You can also check out your contractor with the Better Business Bureau at www.bbb.org.
Insurance fraud – Don’t let anyone pressure you into filing a phony insurance claim. Lying to an insurance company in an attempt to get money is fraud and illegal.
Spam, phishing attempts – Emails that appear to come from your bank, creditor or a charity may actually be an attempt to steal your identity or account information. Remember that financial institutions will never contact you requesting this information.
“If you suspect fraud, report it to local law enforcement, the Better Business Bureau or a state regulatory agency,” said Vice. “Reporting fraud is the best way to keep others from falling victim.”
The following are a few additional tips for protecting yourself from scams:
- Don’t give out personal or financial information unless it’s absolutely necessary. Ask for identification before doing so.
- Don’t pay in cash. Using a check or money order will ensure your donation or payment goes to the correct organization and you have a record for tax purposes.
- Don’t pay for service work until the service is complete and you’re satisfied with the results.
- Get more than one estimate for repairs or service.
- Read and understand a contract before signing. All promises should be made in writing.
- Shop around, but be careful of “disaster” sales that may just be gimmicks.
- Be suspicious of great promises and fabulous offers.
The 14th annual National Consumer Protection Week is March 4-10, 2012 and is sponsored by the Federal Trade Commission and other government agencies and nonprofit organizations. The website www.ncpw.gov offers a variety of free resources to help consumers protect their privacy; manage money and debt; avoid identity theft; understand mortgages and other loans; and recognize fraudulent scams that target consumers.
Report suspected disaster fraud to the National Center for Disaster Fraud (NCDF), toll-free at 866-720-5721.
Also, you can find more information on avoiding scams on DFI’s website at http://kfi.ky.gov/public/Pages/scam.aspx.
DFI, which traces its origin to the Banking Act of 1912, is an agency in the Public Protection Cabinet. For 100 years it has supervised the financial services industry by examining, chartering, licensing and registering various financial institutions, securities firms and professionals operating in Kentucky. DFI’s mission is to serve Kentucky residents and protect their financial interests by maintaining a stable financial industry, continuing effective and efficient regulatory oversight, promoting consumer confidence, and encouraging economic opportunities.
Information on the disaster recovery, relief efforts, safety tips and important information is available at www.kyem.ky.gov .
The Commonwealth Joint Information Center is available for media inquiries from 7:30 a.m. ET to 11:00 p.m. ET, until further notice.