Scammers Target Katrina, Rita Survivors

The victims of the 2005 hurricane season have suffered tremendously -- but for some, the worst financial damage may be yet to come.

As the post-hurricane cleanup continues around the Gulf Coast, state officials are reminding residents about the threat of scam artists seeking to bilk them out of money.

Legal authorities say they've seen scams like price gouging, home repair fraud, vehicle license forgery and even identity theft related to the hurricanes. And the conniving minds looking to profit illegally from the hurricane damage could eventually touch the lives, and finances, of people across the country.

Pumping Up Prices for Illegal Profits

Immediately after Hurricane Katrina, there were widely publicized accusations of price gouging ranging from gas to groceries to hotel rooms.

The consumer protection division of the Mississippi attorney general normally receives about 200 calls per day. That number jumped to around 1,400 per day in the weeks following Katrina, and more than 2,000 price gouging complaints have been investigated.

"On Tuesday -- the day after Katrina -- we got back into the offices and started fielding calls right away," said Jacob Ray, special assistant to Mississippi Attorney General Jim Hood. "Gas gouging was first, then people started telling us that they saw bags of ice on sale for $10, and reporting hotel rooms pumping up the rates three and four times the normal rate."

Once a state of emergency was declared, retailers were forbidden by law from raising prices to boost their profit margins.

"If a business incurs an increase in the cost of getting goods to consumers, you can raise prices. Otherwise it's illegal," said Jennifer Cluck, spokesman for the Louisiana attorney general's office. "When they first hit, we got a lot of calls about price gouging -- from gas to generators, hotel rooms, bottled water. We even got one complaint about the price of Vienna sausages, so it was anything and everything."

A hotel manager in Mississippi who pumped up prices now faces up to five years in prison and a $5,000 fine. Louisiana Attorney General Charles Foti filed suit against a campground that allegedly eliminated daily rates and forced all customers to pay a $900 monthly fee. Both offices say more arrests and lawsuits are likely.

Make Your Contractor Sign a Contract

As the weeks pass and people begin repairing their damaged homes, the nature of consumer complaints has changed, authorities said.

"We've seen a shift. We're getting a lot of contractor complaints -- either people have paid for work that's not done or not done to the satisfaction of the customer," Cluck said.

Contractor scams can come in a variety of forms. The attorneys general are warning consumers to be aware of people posing as licensed contractors, as well as actual contractors who raise labor or materials costs to unreasonable levels. It's important, they said, to limit up-front payments and make sure the contractor performs all work to the specifications agreed upon.

"If you've paid for a four-inch concrete slab in your foundation, and they only put in three inches, it could start cracking after a couple years," said Grant Hedgepeth of the Mississippi attorney general's office. "Most of these problems will be going on for years, because contractor problems sometimes take that long to show up."

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