Protect Your Members From Natural Disaster Scams
By Todd Rovak, CEO, Carefull
October 17, 2024
A highly active 2024 hurricane has brought widespread damage, leaving people throughout the Southeast in desperate need of support. Unfortunately, it also has brought out scammers looking to take advantage of the situation.
Anytime there is a natural disaster, con artists find ways to use it to their advantage. Here’s what your frontline staff need to know about the common scams that crop up when disasters strike to protect members’ money and personal information.
Types of Natural Disaster Scams
Scammers typically use these tactics to take advantage of disaster victims and those who want to help them. Alerting your frontline staff and members to these schemes is a crucial first step in preventing fraud.
Fake charities: Scammers create fake charities after disasters to prey on people’s generosity, according to the Consumer Financial Protection Bureau. Often, these fake charities have names that are similar to legitimate organizations. And scammers take advantage of social media and crowdfunding websites such as GoFundMe to ask for donations.
FEMA imposter scams: Scammers pose as representatives and offer to provide inspections and help disaster victims fill out grant applications for a fee. According to FEMA, these services are free. It’s a scam if anyone is asking for a payment for federal assistance.
Utility scams: Scammers might appear wearing what looks like a utility company uniform and make claims to get a payment, personal information or access to disaster victims’ home. Be aware that utility companies won’t demand payment to restore power after a disaster.
Contractor fraud: Unscrupulous contractors might claim that they can make immediate repairs for an upfront payment, but they’ll take the money and run. It’s also a red flag if they won’t provide a written contract, references or a copy of their license, according to the National Insurance Crime Bureau.
Mortgage relief scams: The CFPB warns that scammers offer relief with mortgage payments and claim to negotiate on homeowners’ behalf for a fee to avoid foreclosure.
IRS imposter scams: Scammers claim to be working with the IRS and offer to help file casualty loss claims and get tax refunds. The IRS won’t contact taxpayers out of the blue to offer assistance. Disaster victims who need help should call the IRS toll-free disaster assistance line at 866-562-5227.
How to Help Your Members Avoid Natural Disaster Scams
Encouraging your members to take the actions below will help protect them from becoming victims of natural disaster scams.
Research before you give. Don’t respond to requests on social media to give or even text messages from friends. Instead, use a website such as CharityNavigator.org to search for charities by cause and see ratings of those charities. Charity Navigator also compiles “where to give now” lists, which can help you find organizations that are responding to recent events such as Hurricane Helene.
Don’t provide personal information to anyone who contacts you offering disaster assistance. Even if they claim to be with a government agency, utility company or an insurance company, they could be scammers. Contact the company or agency directly for support.
Don’t pay for government assistance. No FEMA, federal or state government workers will ask for or accept payment, according to CFPB. Don’t believe anyone who is offering a disaster grant in return for a payment. FEMA.gov has a list of resources for those impacted by the hurricane.
Don’t feel pressured to make immediate decisions about repairs. The National Insurance Crime Bureau recommends contacting your homeowner’s insurance company before making any decisions or signing contracts for repairs. Get repair estimates from multiple contractors, get agreements in writing and don’t pay the full amount upfront.
Don’t pay anyone to negotiate with your mortgage provider if you’re having trouble making payments. Contact your lender, which should be willing to discuss hardship options to help you avoid foreclosure. Or contact a housing counselor approved by the Department of Housing and Urban Development who can provide free or low-cost assistance.
When it comes to preventing your members from being scammed, education is key. Financial Industry Regulatory Authority research show that if your members are aware of a specific scam, they will be 80% less likely to interact with it. Keeping them informed about the latest scams can keep them safe.
Connect with Carefull to learn more.
About Carefull
Carefull is a PRT (protect/retain/transfer) service for credit unions purpose-built to protect older members, retain deposits, and bridge to the next generation ahead of wealth transfer. It is the first and only digital platform designed to help credit unions protect the daily finances of seniors while assisting the adult children who often support them.