Sept. 3, 2012 -- It's as predictable as the weather is unpredictable. As the people of Louisiana and Mississippi struggle through another post-hurricane flood, con artists are going to come out of the woodwork and try to profit from their losses.
So here's a reminder of the top three scams that usually float to the surface after every natural disaster.
Fly-by-night repair crews can wreak financial havoc after a family has already suffered through mother nature's blows. Here are the telltale signs of an unlicensed contractor:
•Door-to-door Solicitations. Legitimate, licensed contractors have all the work they can handle and don't solicit that way.
•Payment in advance. Unscrupulous contractors often demand their money up front, then do shoddy work --or no work at all. Even with a licensed contractor, you should never pay up front. Instead, pay in installments, and don't let your payments get ahead of the work that's actually been done.
•No physical address. Unlicensed contractors often offer up just a cell phone number and maybe an Internet address. What you want is a physical address where you can show up to complain --or serve a lawsuit-- if things go wrong.
To verify that a contractor is properly licensed, check the business name and the owner's name with your state or county. Not all states require contractors to be licensed, which is a shame. In that case, you will have to be extra diligent about checking the contractor's reputation with your state and county consumer protection agencies and with the Better Business Bureau, at www.bbb.org.
Fake Disaster Relief Drives.
In my years as a consumer reporter, I've never seen a natural disaster that greedy people didn't try to profit from. They pretend to be collecting money for victims then keep it for themselves. Once again, there are red flags to look for:
•Emotional Pleas. If the pitch for assistance is long on pathos and short on details, that's suspicious. Demand written proof of the organization's mission and good standing.
•Copycat names. Fake charities often use names that are very similar to those of real ones. They'll substitute one word, like "foundation" instead of "association." So if the name sounds off to you, search it online and see what comes up.
•High pressure. If you are pressed to give money on the spot, beware. That's a classic scam tactic, because the bad guys want to get your money and run.
•Courier Pickup: Fake charities have been known to send a courier to pick up your payment rather than asking you to send it through the mail. Why? Because they want to avoid US mail fraud laws.
The best way to help after a disaster is to "be the hunter, not the hunted." In other words, research and seek out charities you are interested in giving to, rather than responding to those that come after you. To make sure that even a real charity makes good use of your funds, check its rating with the Better Business Bureau Wise Giving Alliance. Once again, the destination is www.bbb.org.
This is a term that's often misused to refer to anything that is outrageously expensive. But remember, we live in a free market economy, so businesses can charge any price they want if people will pay it --EXCEPT when a disaster is looming. The actual, legal definition of "price gouging" is when businesses charge extra for emergency supplies in the face of a disaster. That's illegal.
If you feel you have been gouged for supplies like gasoline, batteries, bottled water and so on, contact your state attorney general to complain. Go to www.naag.org to find yours.