Officials Warn Disaster Victims Against Contractor Fraud

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Release date: 
May 29, 2001
Release Number: 
1369-12

La Crosse, WI -- Don't be a fraud victim as well as a flood victim, emergency officials urged.

"Sadly, scam artists often prey upon disaster victims," said Al Shanks of Wisconsin Emergency Management (WEM). "These unscrupulous operators take advantage of others' misfortune. They move in when people are still reeling from the effects of the disaster and are most vulnerable. Struck by disaster, homeowners then find themselves victims of fraud, as well."

"Neither FEMA nor WEM approves, certifies or recommends contractors," said Tom Davies, of FEMA. "Any contractor who says he is FEMA or WEM approved is a fraud. Always check contractors' credentials before hiring them. "

All flyers issued by FEMA or WEM should have the appropriate logo printed on them. When in doubt, call the FEMA disaster information Helpline at 1-800-525-0321 or visit the nearest Disaster Recovery Center.

WEM and FEMA offer the following "Consumer Beware" guidelines:

Use Reliable, Licensed Contractors: Ask to see the contractor's license before signing a contract or agreeing to anything. Reputable contractors are licensed.

Get a Written Estimate: Be sure to obtain a written estimate for the job, and read the fine print. Compare the services and prices of several reputable contractors before making a final decision. Deal locally if possible.

Ask for References: Call former customers who have had similar work done to make sure they were satisfied with the job.

Proof of Insurance: Make sure the contractor carries general insurance and workers' compensation. If the contractor is not insured, the homeowner may be liable for accidents that occur on the property or to the house or building.

Obtain a Contract: A complete contract will state the tasks to be performed and all associated costs. Never sign a blank contract or one with blank spaces. Make sure the agreement states who will apply for the necessary permits or licenses. Have a lawyer review the contract if substantial costs are involved.

Written Guarantees: Ask for a written guarantee stating who is responsible for equipment and materials.

Pay by Check: If possible, avoid on-the-spot cash payments. The safest route is to write a check made out to a contracting agency. Federal law requires a three-day "cooling off" period for unsolicited door-to-door sales of more than $25.

Canceling a Contract: Canceling a contract should be done within three business days of signing. Be sure to follow the agreements stated in the cancellation clauses and send the notification by registered mail.

Have Work Inspected: If excavation work is being performed (e.g., sewers or basement walls) make sure a qualified observer inspects the work before it is hidden from view to avoid similar problems in the future.

Last Updated: 
July 16, 2012 - 18:46
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