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BBB Alerts Consumers To Potential Charity Scams, Contractor Ripoffs After February Tornadoes

2/29/2012

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St. Louis, Mo., Feb. 29, 2012 With areas of Missouri and Illinois laid waste by tornadoes and severe storms that swept across the Midwest last night, the Better Business Bureau (BBB) warns consumers to be on the lookout for potential scams linked to charities or contractors seeking to cash in on the damage.

While the Red Cross and other established charities shift into disaster response mode and seek donations to cover their costs, scammers also may jump on the chance to cash in on sympathy for storm victims.  Fly-by-night contractors often go door to door after storms, offering to help victims clear debris or patch up homes.

Michelle Corey, BBB President and CEO, advises consumers to check charities and businesses out with the BBB before writing a check or making an online donation. BBB Business Reviews and Charity Reviews give consumers vital information about how companies and charities operate and whether they take care of complaints.

“Donors want to make sure their money goes to well-run relief organizations that are equipped to handle the challenge of assisting those in a disaster zone,” Corey said.

 “Likewise, homeowners need to be sure that a contractor will honor promises and not just take their money and run,” Corey said. “Consumers need to make sure that the contractors are qualified and reliable before they sign a contract or pay any money.”

BBB tips on making charitable donations include:

  • Rely on respected experts to evaluate a charity. The BBB provides a Wise Giving Guide to charities at www.bbb.org/charity. The guide shows which charities are accredited by the BBB and whether they meet the BBB’s 20 Standards for Charity Accountability.
  • Be wary of claims that 100 percent of donations assist victims. All charities have fund-raising and administrative costs. Even a credit card or text donation will involve, at least, a processing fee.
  • Be cautious when giving online to unfamiliar charities. Be wary of spam messages and emails that claim to link to a relief organization. After the tsunami disaster in 2004, the earthquake in Haiti in 2010 and the earthquake and tsunami in Japan last year, many websites and organizations created overnight allegedly to help victims turned out to be scams.
  • Find out if the charity has a presence in the affected areas. Unless the charity already has staff in the affected areas, it may be difficult to get new aid workers into the area to provide assistance.  See if the charity’s website clearly describes what it can do to address immediate needs.
  • Find out if the charity is providing direct aid or raising money for other groups. You may want to avoid the middle man and give directly to charities that have a presence in the region.  Check out the ultimate recipients of the donations to ensure that the organizations are equipped to effectively provide aid.
  • Gifts of clothing, food or other in-kind donations may not be appropriate. Unless the organization has the staff and infrastructure to distribute such aid, the donations may be more of a burden than a help. Ask the charity about their transportation and distribution plans. Be wary of those who are not experienced in disaster relief.

The BBB also has tips for consumers and businesses looking for contractors to make repairs:

  • Be cautious of door-to-door salespeople who use high-pressure sales tactics.
  • Seek at least three bids from prospective contractors based on the same specifications, materials and labor needed to complete the project.
  • Ask whether the company is insured against claims covering workers’ compensation, property damage and personal liability in case of accidents. Consumers should obtain the name of the insurance carrier and call to verify coverage.
  • Ask whether the contractor meets licensing and bonding requirements set by the state, county or city.
  • Find out whether permits are needed before proceeding with the work. The contractor also should be aware of any required permits.
  • Ask whether the contractor will provide a lien waiver upon completion of the job. A lien waiver is a statement by the contractor that all suppliers and subcontractors have been paid for their work.
  • Read and understand the contract before signing. Get any verbal promises in writing. Include start and completion dates in the contract.
  • Remember the rule of thirds. Pay one third at the start of the project, one third when work is 50 percent completed and one third after completion.

For more information to help you make smart, informed decisions about projects around your home, check with the BBB by going online to www.bbb.org or by calling 314-645-3300.

Contacts: Michelle Corey, President & CEO, 314-584-6800, mcorey@stlouisbbb.org, or Chris Thetford, Vice President-Communications, 314-584-6743 or 314-681-4719 (cell), communications@stlouisbbb.org

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