As Hurricane Milton gradually tracks away from Florida, leaving deadly storm surges, flooding rain and high winds in its path, it is an unfortunate reality that fraudsters will try and capitalise on the misfortune and vulnerability of those affected. This
week, the
US Justice Department, the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) issued a warning to consumers, asking them to avoid “engaging in potential fraud, price gouging and collusive schemes.”
Types of natural disaster scams
Victims and those supporting them should remain cautious of:
- potentially fraudulent charities raising money, imitating names of charities linked to the disaster,
- fraudsters posing as government officials asking for personal information or money in exchange for disaster relief,
- fraudsters promoting non-existent disaster recovery organisations such as flood-proofing and rebuilding, and
- increased prices for basic goods or under the pretense of supply chain disruption.
How to avoid natural disaster scams
After the devastation of Hurricane Katrina in 2005, the Justice Department established the National Center for Disaster Fraud (NCDF) to prevent, look into and prosecute fraud in the wake of natural disasters. The organisation has over 50 federal, state and
local groups involved and all collaborate to remind the public to be vigilant and to report alleged fraudulent activity associated with relief operations and funding for victims.
To avoid frauds in the midst of recovering from a hurricane or another natural disaster, the following must be considered:
- avoid scammers who will insist payment by wire transfer, gift card, payment app, cryptocurrency or in cash,
- avoid those who promise relief for a fee,
- never sign your insurance over to someone else,
- research contractors and get estimates from more than one before signing contracts for work, and
- get written contracts for repairs and read it carefully before signing it.
How to report natural disaster fraud
Complaints of fraud can be reported online at www.justice.gov/DisasterComplaintForm, or to the NCDF at (866) 720-5721, a phone number that is staffed 24 hours a day, seven days a week. Individuals
and organisations concerned about potentially anticompetitive conduct like price-fixing, bid-rigging, or customer-allocation can report to the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or by visiting www.justice.gov/atr/report-violations.
Deputy Assistant Attorney General Manish Kumar of the Justice Department’s Antitrust Division highlighted that: “Companies are on notice: do not use the hurricane as an excuse to exploit people through illegal behavior. The Antitrust Division and its law
enforcement partners will act quickly to root out anticompetitive behavior and use every tool available to hold wrongdoers accountable.”
US Attorney Ronald C. Gathe Jr. for the Middle District of Louisiana, who is also executive director of the National Center for Disaster Fraud (NCDF), continued: “Wrongdoers are looking to exploit opportunities and victims of natural disasters for their
own personal gain. The Justice Department, including the NCDF, stands ready to prevent these bad actors from fraudulent activity. We are here to support victims of natural disasters during these difficult times together with our state, local and federal partners,
and agencies. In an effort to assist the most vulnerable neighbors who are susceptible to these types of fraudulent schemes, we encourage you to be diligent in reporting suspicious activity on their behalf.”
FTC Chair Lina M. Khan added: “As Americans seek safety from natural disasters, we’re hearing troubling reports of price gouging for essentials that are necessary for people to get out of harm’s way — from hotels to groceries to gas. No American should have
to worry about paying grossly inflated prices when fleeing a hurricane. In partnership with state enforcers, the FTC will keep fighting to ensure that Americans can get the relief they need without being ripped off by bad actors exploiting a crisis.”
CFPB Director Rohit Chopra also warned: “Price gouging during a natural disaster is just plain wrong, and excessive price increases can be unfair under the law. The CFPB will be on the lookout for financial companies that take advantage of natural disasters
to rip people off.”