After the Disaster: Tips & Best Practices

June 23, 2017


Con artists travel to and target disaster sites to take advantage of victims who are desperate to repair damage right away and return to a sense of normalcy. Being an informed consumer is your best defense to avoid becoming a scam victim. This Alert gives you information on how to spot and stop common post-disaster scams.


Price Gouging

Basic goods and services are top priorities after disaster strikes: the demand for them increases and scammers take advantage. If a local hotel charged $100 for a room the day before a disaster and then charged $150 for the same room the day after a disaster, is that illegal gouging? Michigan law prohibits any retailer from charging a price that is “grossly in excess of the price at which similar property or services are sold.” Even though Michigan does not have a law specifically prohibiting price gouging in direct response to a disaster, the Attorney General does not tolerate any unscrupulous behavior when it comes to gouging.


Scammers Attracted by FEMA Payments

Scammers swarm to weather disasters to take advantage of otherwise careful consumers who have FEMA money for repairs and want to act quickly to avoid further problems like mold or rot. Ignore door-to-door solicitors offering damage recovery or discounts with leftover supplies from another job. FEMA inspectors and other federal workers never solicit or accept money


Emergency Home Repairs

Home repair and disaster cleanup scams can be avoided if you know what to look for and take your time before you hire anyone. If any of the following warning signs are present, walk away: High-pressure sales; urgency to act; confusing contract terms; inability to produce a license or references; wants to be paid in cash; has a history of complaints; won’t put the offer or terms in writing; has an out-of-state license plate; or has no business sign on car or truck.


Sudden Business Closures

If a business suddenly closes that you have dealings with, act quickly to stop any further charges or any scheduled payments by your bank or card company. Timely dispute credit card charges: swift action can be the difference between holding a refund and holding the bag. If goods or services that you contracted for are not delivered, then you may file a consumer complaint with the Attorney General’s Consumer Protection Division. You should do this as soon as you can to help minimize any loss and maximize any recovery. Common problems include missed delivery dates; requests for extra money before delivery; and changing stories about delivery delays.


Disaster Relief Charity Scams

Scam artists see disaster tragedies as opportunities to enrich themselves. These scammers exploit the sympathy of donors— perhaps with a name sounding both compassionate and legitimate or with a heart-wrenching appeal—to steal the donations or to obtain consumers’ sensitive financial information. You can avoid disaster scams and still make a positive contribution to relief and rebuilding projects if you act wisely before you donate.


How to Avoid Being Scammed:

  • Seek out and work with Accredited Businesses in your area. These business have proven trustworthy, reliable, and properly credentialed.

  • Check credentials: Michigan law requires a Residential Builder license for any project costing $600 or more.

  • FEMA inspectors verify damages, but they do not involve themselves in any repair, and they do not “certify” any contractor.

  • Weather disasters and other unpredictable conditions can trigger suddenly higher prices. File a consumer complaint with the Attorney General’s Consumer Protection Division if you suspect price gouging.

  • Don’t put your hard-earned money into a flood damaged lemon: inspect vehicles closely or take it to an independent mechanic to inspect.


For more information, refer to this helpful resource from Michigan's Attorney General.