How To Avoid Storm Chaser Fraud After Harvey

Dated: 09/13/2017

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In the coming weeks, as millions of Texans & Floridians return home to rebuild damaged houses and repair flooded cars, they should be alert to a looming threat: "storm chasers."

Exploitative contractors come into disaster-struck regions looking to make a quick buck off vulnerable people. The fraudsters try to sell victims on phony repair deals, lemon cars, and they demand payment up front.

"We've seen it after every significant disaster, and we don't expect anything different once the Harvey-induced floods recede," said Frank Scafidi, spokesman for the nonprofit National Insurance Crime Bureau.

Texas Attorney General Ken Paxton has already issued a statement warning citizens of "bad actors ... taking advantage of victims and their circumstances."

The attorney general's office announced last week that it had created a hotline to report suspected fraud. It has already received 550 Harvey-related complaints, a spokeswoman told CNNMoney.

After Hurricane Katrina hit New Orleans in 2005, the Justice Department created a special task force to crack down on storm-chaser scams. A Justice Department spokeswoman said more than 1,400 people have been prosecuted for Katrina-related fraud.

"We saw it big time after Katrina and the Baton Rouge flooding in 2016," said Louisiana insurance commissioner Jim Donelon.

Since Katrina, the task force has expanded into the National Center for Disaster Fraud, which has referred more than 50,000 cases to law enforcement, according to 2016 Justice Department figures.

Former Louisiana U.S. Attorney Walt Green, who led the NCDF from 2013 to 2017, said unscrupulous people are already "flooding the zone" in Harvey's aftermath.

It can be tough to spot storm chasers, but there are some best practices to follow.

Green advised people not to be pressured and rush to sign a repair contract. And don't pay cash or write a check up front, he recommended, or you risk scammers taking off with your money. Pay in installments and wait until the repair work is completed to your satisfaction to make the final payment.

Use local companies that you've used in the past and trust, advised Mark Hanna of the Texas Insurance Council.

"It takes some digging and sophistication on behalf of the consumer to prevent being taken advantage of," said Louisiana's Donelon. "The best protection is personal references. Ask your relatives, neighbors and friends who have had good experiences with contractors."

Check with the Better Business Bureau to make sure contractors are licensed in Texas and ask for their references. Ask your insurer for recommendations if you don't have a reliable contractor you've used in the past.

Get more than one bid on work, so you know if you're being overcharged, and never sign a blank contract, according to the Texas Department of Insurance.

Be wary of car fraud, too, said Frank Scadifi of the National Insurance Crime Bureau. After Katrina, the organization found that people were fixing up flood-damaged vehicles and reselling them as used vehicles in Louisiana.

Do a vehicle inspection number check, which gives you information about prior damage and repairs to the car, before purchasing used vehicles. That way you won't end up with a car that was previously flooded by Harvey.

CNNMoney

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