After the Flood - Be Wary of Scammers Attracted by FEMA Payments
The Attorney General provides Consumer Alerts to inform the public of unfair, misleading, or deceptive business practices, and to provide information and guidance on other issues of concern. Consumer Alerts are not legal advice, legal authority, or a binding legal opinion from the Department of Attorney General.
AFTER THE FLOOD - Don’t Let a Flood Emergency Lead to a Flood of Scams;
Be Wary of Scammers Attracted by FEMA Payments
Flood and other weather disasters take an emotional, physical, and often a financial toll on all affected. Whatever the type of disaster – affected homeowners want to repair the damage right away to get back to a sense of normalcy. And with a flood, when acting quickly to avoid further problems such as mold infestation can be important, or when the availability of FEMA payments to flood victims is in the news, a weather disaster is an invitation to unscrupulous scammers seeking to take advantage of otherwise careful consumers. Don’t lose FEMA disaster payments to fraudulent contractors or otherwise let the aftermath of a flood turn into an opportunity for scams.
For Emergency Help Information and Shelter Resources: Phone the 211 line United Way referral service, or the local Red Cross at 1-800-774-6066 (Southeastern Michigan Regional Chapter) or visit: http://www.redcross.org/mi/detroit/about/contact.
Avoid Being Scammed
To avoid falling victim to con artists who often travel to disaster sites in order to take advantage of homeowners desperate to return to “normal,” make sure you take the following steps:
- Breathe! Take some time to absorb what has happened, and don’t make any rash decisions before doing your homework. This is especially true if you are approached by anyone telling you they can fix your home right away – but only if you accept their “help” right now. Legitimate home repair contractors and other service providers understand that you need time to do your homework and check them out before you pay them anything or sign any contracts.
- Keep Your Guard Up. Ask to see the ID of anyone who wants to enter your home or business, and make sure you can believe it by checking them out with the governmental authority or the company they claim to be from. Avoid giving out your personal information. Some scam artists masquerade as safety inspectors or utility workers who say immediate work is required. FEMA inspectors verify damages, but do not involve themselves in any aspect of the repair nor recommend or ‘certify’ any contractor. FEMA inspectors or other federal workers never solicit or accept money. Ignore door-to-door solicitors offering damage recovery. Reputable professionals in the industry rarely solicit door to door. And, be especially wary of anyone who approaches you unsolicited and asks you to pay cash for their services or says they can perform your repairs at a discount with leftover supplies from another job.
- Do your homework before hiring a water clean- up company or home repair contractor.
- Check the company’s complaint history by calling the Attorney General’s Consumer Protection Division (toll free) at 1-877-765-8388, and contacting the Better Business Bureau.
- For home repairs, ask if contractor is licensed and insured, and demand to see proof. Taking this step may help you distinguish between legitimate contractors and unlicensed scam artists offering to "save you money" by performing work that requires a license without proper credentials. And then check to see if the contractor has been disciplined or if the license has been suspended or revoked. Builders and contractors are licensed by the Licensing Division of the Bureau of Commercial Services, Michigan Department of Licensing and Regulatory Affairs (LARA). Consumers may visit the Bureau of Commercial Services' website to verify current license status and check for prior disciplinary action. You may also call 517-373-8376.
- Get a written contract before any work is performed or payment is made! Ensure that all promises, quotes, and expectations are put in writing in a contract that you review carefully before signing. Ideally, get quotes from two or three other companies before signing. Avoid paying in cash. Paying for a home repair using a credit card is recommended, because using credit cards provides you with added protection to dispute a charge if the repair is not completed. Finally, you should never pay for an entire home repair up-front. To ensure that all work is completed in accordance with the contract terms and your expectations, arrange to pay for only part of the work (generally one-third of the total contract price should suffice) up-front and pay for the rest of the work once it is complete to your satisfaction.
- A Consumer Alert with additional information and advice on choosing a building contractor or company for home remodeling and repair is available at: http://www.michigan.gov/ag/0,4534,7-164-17337_20942-44670--,00.html .
Under the Michigan Consumer Protection Act, a provider of goods or services used primarily for personal or household purposes may not charge a price that is "grossly in excess of the price at which similar property or services are sold." Unfortunately, weather disasters and other unpredictable conditions can trigger suddenly higher prices. Consumers should be careful when faced with these sudden price spikes, as not all providers may have raised their prices or raised them to the same level. And, if consumers have evidence of grossly excessive prices, we encourage that they contact the Attorney General's Consumer Protection Division at 1-877-765-8388 and file an online complaint at www.michigan.gov/ag. Specific information that would be helpful to provide include details of the specific item or service at issue, the business selling the item or service, the exact price charged, prices being charged by other businesses for the same or similar services, and a copy of the receipt if you purchased the goods or services at issue.
BEWARE OF BUYING A FLOOD DAMAGED VEHICLE
After the flood has passed, an unfortunate aftermath may be a flood of water-damaged vehicles on the used car market. Floods can damage vital parts of a car including airbag sensors, brakes, and electrical system – and the damage may not show up right away. Be on the lookout for used car sale offers that seem ‘too good to be true.’ Before purchasing, have the vehicle inspected by an independent, competent automotive technician who has no relation to the seller. Also check the vehicle history through the National Motor Vehicle Title Information System established by the Department of Justice at www.vehiclehistory.gov. A Consumer Alert with additional information on how to protect against purchasing a flood damaged vehicle is available at: http://www.michigan.gov/ag/0,4534,7-164-17337_20942_21106-294095--,00.html .
TO FILE A COMPLAINT
Complaints against a licensed builder may be filed with the Michigan Department of Licensing & Regulatory Affairs, Bureau of Commercial Services, Enforcement Division. Complaint filing instructions and complaint form available at online at: http://www.michigan.gov/lara/0,4601,7-154-35299---,00.html. If the contractor is not licensed and is required to be, contact your local authorities, because failure to obtain a license may constitute a violation of criminal law.
Those who suspect fraud are also encouraged to report it to the FEMA Disaster Fraud Hotline at 1-866-720-5721.
Other complaints may be filed with the Attorney General's Consumer Protection Division at:
Consumer Protection Division
P.O. Box 30213
Lansing, MI 48909
Toll free: 877-765-8388
www.michigan.gov/ag (online complaint form)