Protect Your Members From Natural Disaster Scams
By Todd Rovak, CEO, Carefull
Every major disaster brings two waves: first the storm, then the scammers. After Hurricanes Helene and Milton struck the Southeast in fall 2024, the DOJ, FTC and CFPB issued a joint warning about the flood of fraud attempts targeting survivors and the pattern has repeated after every major disaster since.
Anytime there is a natural disaster, scammers find ways to use it to their advantage. Here’s what your frontline staff need to know about the common scams that crop up when disasters strike so they can protect members’ money and personal information.
Types of Natural Disaster Scams
Scammers typically use these tactics to take advantage of disaster victims and those who want to help them. Alerting your frontline staff and members to these schemes is a crucial first step in preventing fraud.
Fake charities: Scammers create fake charities after disasters to prey on people’s generosity, according to the Consumer Financial Protection Bureau. Often, these fake charities have names that are similar to legitimate organizations. And scammers take advantage of social media and crowdfunding websites such as GoFundMe to ask for donations.
FEMA imposter scams: Scammers pose as FEMA representatives and offer to provide inspections or help disaster victims fill out grant applications for a fee. According to FEMA, these services are free – if anyone is asking for payment for federal assistance, it’s a scam. FEMA employees always carry a laminated photo ID; a jacket or shirt alone isn’t verification. If in doubt, call FEMA directly at 800-621-3362.
Utility scams: Scammers might appear wearing what looks like a utility company uniform and make claims to extract a payment, personal information or access to disaster victims’ homes. Be aware that utility companies won’t demand payment to restore power after a disaster.
Contractor fraud: Unscrupulous contractors might claim that they can make immediate repairs for an upfront payment, but they’ll take the money and run. It’s also a red flag if they won’t provide a written contract, references or a copy of their license, according to the National Insurance Crime Bureau.
Mortgage relief scams: The CFPB warns that scammers offer relief with mortgage payments and claim to negotiate on homeowners’ behalf for a fee to avoid foreclosure.
IRS imposter scams: Scammers claim to be working with the IRS and offer to help file casualty loss claims and get tax refunds. The IRS won’t contact taxpayers out of the blue to offer assistance. Disaster victims who need help should call the IRS toll-free disaster assistance line at 866-562-5227.
How to Help Your Members Avoid Natural Disaster Scams
Encouraging your members to take the actions below will help protect them from becoming victims of natural disaster scams.
Research before you give. Don’t respond to requests on social media to give or even text messages from “friends”. Instead, use a website such as CharityNavigator.org to search for charities by cause and see ratings of those charities. Charity Navigator also compiles “where to give now” lists, which can help you find organizations that are responding to recent events such as Hurricane Helene.
Don’t provide personal information to anyone who contacts you offering disaster assistance. Even if they claim to be with a government agency, utility company or an insurance company, they could be scammers. Contact the company or agency directly using a number you’ve verified yourself.
Don’t pay for government assistance. No FEMA, federal or state government workers will ask for or accept payment, according to the CFPB. Don’t believe anyone who is offering a disaster grant in return for a payment. FEMA.gov has a list of resources for those affected by the most recent disasters. If you suspect disaster fraud, report it to the DOJ’s National Center for Disaster Fraud at 866-720-5721 or StopFEMAFraud@fema.dhs.gov.
Don’t feel pressured to make immediate decisions about repairs. The National Insurance Crime Bureau recommends contacting your homeowner’s insurance company before making any decisions or signing contracts for repairs. Get repair estimates from multiple contractors, get agreements in writing and don’t pay the full amount upfront.
Don’t pay anyone to negotiate with your mortgage provider if you’re having trouble making payments. Contact your lender, which should be willing to discuss hardship options to help you avoid foreclosure. Or contact a housing counselor approved by the Department of Housing and Urban Development who can provide free or low-cost assistance.
When it comes to preventing your members from being scammed, education is key. Research shared by the FINRA Investor Education Foundation finds that people who’ve heard of a specific scam type before being targeted are 80% less likely to lose money to it. Keeping members informed about the latest scams, before the next disaster hits, can keep them safe.
Connect with Carefull to learn more.
