Tips for Avoiding Disaster-Related Fraud

Disasters tend to bring out the best in people. But unfortunately, disasters also can bring out some of the worst in people too. Fly-by-night contractors and scam artists follow in the wake of disasters to prey on vulnerable victims.

Following are some of the typical types of fraud that can take place after a disaster and suggestions for how you can avoid them. This material is based on information provided by Darryl Neier, a detective sergeant in the Morris County prosecutor's office and a member of the NJSCPA.

Price Gouging

Unfortunately, occurrences of price gouging following a disaster are well documented. Most businesses are community minded and deal with their neighbors fairly. Some, however, are not. To report price gouging situations in New York, call the New York State Department of Consumer Affairs at (212) 487-4444. In New Jersey, contact N.J. Division of Consumer Affairs at (973) 504-6200.

Advanced Fee Loan Scam

If you need to get a loan quickly, don't be tempted by promises of "guaranteed" loans for up-front fees. Telephone solicitors may request a loan initiation fee ranging from $100 to several thousand dollars. Fraud prevention experts warn that you may never get a loan or see your money again.

Door-to-Door Solicitation and Charity Fraud

In the wake of a disaster, you may find a series of solicitors at your door seeking donations to help with recovery efforts In most municipalities, anyone soliciting door-to-door must be registered with the local police department.

For peace of mind, donate directly to the charity of your choice. Frequently, the door-to-door solicitors are only in town long enough to take advantage of the situation.

Before you donate, remember: