FEMA and State Alert to Fraud

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Release date: 
July 27, 2006
Release Number: 
1650-030

ALBANY, N.Y. -- The Federal Emergency Management Agency (FEMA) and New York State officials warn flood victims to be especially alert to fraud during the recovery process. The most common types of fraud after disaster strikes are: improper use of federal recovery funds by recipients, contractor fraud, and price gouging.

FEMA reminds disaster aid applicants that, when they register, all information must be reported honestly and accurately, and all federal funds must be used solely for disaster recovery.

“Sometimes, in the immediate crisis of a disaster, people don’t accurately report their damages or losses,” said Federal Coordinating Officer Marianne C. Jackson. “People may omit something or may report a loss not related to the June flooding.”

Anyone who makes an error when submitting a claim can contact the FEMA Helpline at 1-800-621-FEMA (3362). Individuals with hearing or speech impairments should call (TTY) 1-800-462-7585. The lines are open from 8 a.m. to 8 p.m., daily.

FEMA recognizes that people make mistakes. However, in every disaster a few people want to profit from the disaster through fraudulent reporting. “I want to assure all New Yorkers that we will not tolerate fraud, waste, and abuse of federal disaster funds,” Jackson said.

Government officials use a variety of methods to detect fraud such as an electronic process to crosscheck information from FEMA, New York State, partner agencies, and insurance companies. Additionally, FEMA inspectors check applicants’ homes to verify claimed damages and losses. FEMA refers all suspected fraud cases to the Office of the Inspector General (OIG). The OIG may refer cases to the United States Department of Justice.

Violators, who file false damage claims, try to collect for damages that are not flood-related, or misrepresent themselves in any way, may be prosecuted under federal law. Convictions can lead to significant fines and imprisonment.

Flood victims must also be alert to contractor fraud and price gouging. While most contractors are reputable, some may take advantage of those in need of urgent repairs. Government officials offer the following fraud prevention tips:

  • Be wary of contractors who solicit work door-to-door or who promise –“I’ll do it right away and cheap.”
  • Get estimates from more than one licensed, bonded, and reputable contractor.
  • Get a contract in writing. It should cover what is to be done, when work starts, cost, payment schedules, and the quality of materials to be used.
  • Be careful that your signature on a contractor’s bid is not an authorization to begin work.
  • Ask to see proof of a contractor’s license and building permits.
  • Make sure repairs are done according to local building codes.
  • Don’t make final payment until the job is finished and all work that requires a city or county inspection is officially approved in writing.
  • Don’t sign over an insurance settlement check to a contractor.

Anyone with knowledge of fraud, waste, or abuse involving FEMA contracts, programs, or personnel may call the FEMA OIG Fraud Hotline at 1-800-323-8603. The hotline is available 24 hours a day, seven days a week. You may also send an e-mail to DHSOIGHOTLINE@dhs.gov.

For help with contractor fraud, call the State consumer helpline at 1-800-771-7755.

FEMA manages federal response and recovery efforts following any national incident. FEMA also initiates mitigation activities, works with state and local emergency managers, and manages the National Flood Insurance Program. FEMA became part of the U.S. Department of Home...

Last Updated: 
July 16, 2012 - 18:46
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