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FEMA cautions against fraud

The Federal Emergency Management Agency (FEMA) is cautioning people to check IDs as reports of con artists surface.

BY SUSAN KIM | BALTIMORE | November 19, 2004


"Citizens of our country work very hard to earn a living, and we will pursue and prosecute anyone who seeks to defraud them."

—Bill Carwile


The Federal Emergency Management Agency (FEMA) is cautioning people to check IDs as reports of con artists surface.

Scammers have been knocking on doors, or phoning hurricane-impacted households, and soliciting personal information such as social security numbers and bank account details.

Onsite FEMA inspectors never require this information. A social security number or bank account number may be requested during a survivor's first phone call to FEMA's tele-registration line. After that, the most an onsite FEMA inspector will ask for is the last four digits of a social security number.

"Consumers should keep in mind that a FEMA or SBA (Small Business Administration) shirt or jacket is not absolute proof of someone's affiliation with these agencies," explained Federal Coordinating Officer Bill Carwile. "The best way to verify authorized FEMA or SBA personnel is by checking their laminated photo identification card, which they are required to wear at all times."

Homeowners have also been visited by fraudulent FEMA inspectors telling them they need to pay $1,500 to be put on a list to get their home repaired. Other reports have surfaced of people pretending to be from the SBA and offering to fill out disaster loan applications for a $50 fee.

Under no circumstances do FEMA or SBA representatives accept money, said FEMA officials. In addition, FEMA inspectors assess damage but do not hire or endorse specific contractors to fix homes or recommend repairs.

FEMA has taken every precaution to prevent fraud, said FEMA spokesperson Lisa Pierce. "Federal assistance is taxpayer money and FEMA is committed to managing it as responsibly as possible. We do this by publishing news releases about possible scams, sending instruction letters to victims that explain how FEMA funds should be spent, random audits, and encouraging individuals to call the FEMA fraud hotline."

Fraud isn't limited to people posing as FEMA officials. Sometimes disaster survivors take advantage of government aid.

The Office of Inspector General (IG) investigates citizen complaints of fraud, waste or abuse involving FEMA contracts, programs or personnel. By Nov. 8, the IG had received and investigated 1,576 complaints.

The IG maintains a FEMA fraud hotline at 1-800-323-8603. Fraud may also be reported to the Florida Attorney General's Office at 1-866-966-7226.

Some complaints filed indicate applicants in Florida have used false names and addresses. People have claimed losses that weren't disaster-related, and applicants have also used FEMA funds for unintended purposes. IG reports also indicate township officials have used FEMA money for their own benefit. Stolen FEMA checks were also reported.

Applicants have also received duplicate payments from FEMA and their insurance companies.

That's something that won't be tolerated by FEMA, said Carwile. "Citizens of our country work very hard to earn a living, and we will pursue and prosecute anyone who seeks to defraud them."

Florida state officials said they have joined FEMA in the battle against fraud. "Together with our partners in FEMA we will be very vigilant," said State Coordinating Officer Craig Fugate. "We will make sure that the benefits of our programs go to the people of our state who suffered so much when the hurricanes hit Florida. We do not want our assistance payments to end up in the hands of undeserving individuals or businesses."

Other ways to avoid becoming a victim of fraud:

-- Check on a contractor's licensing status in the state of Florida, visit the state of Florida's licensing information portal on the Web; or check with your local Better Business Bureau, homebuilders association, or trade council to see if any unanswered complaints have been filed against the contractor.

-- Ask a contractor for proof of insurance. If a contractor is uninsured, you may be liable for accidents on your property. Make sure a contractor has both disability and worker's compensation insurance.

-- Ask for a written estimate and check to make sure it includes all work you expect to have done, as well as taxes and other fees. Some contractors charge for an estimate.

-- When you decide on a contractor, ask for a written contract that includes all tasks to be performed as well as associated costs; a timeline and payment schedule; and who is responsible for necessary permits and licenses. Never sign a blank contract.

-- Do not give anyone an advance cash payment. Pay by check in order to keep a record and avoid double charges.

-- Be aware that legitimate contracts normally do not require more than one-third of the total charges as a down payment.

-- Ask for a written guarantee that states what is covered, who is responsible, and how long the guarantee is valid.

-- If you feel uncomfortable about a contract and have already signed it, cancel it quickly. You may cancel a contract within three business days after signing. Be sure to follow the contract cancellation clause procedures.


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