In the aftermath of a hurricane or other major storm, you may face overwhelming challenges. While assessing and repairing damage is critical, it’s also essential to be wary of potential contractor fraud. Unfortunately, after such disasters, the risk of fraudulent activities increases, with unscrupulous contractors targeting vulnerable organizations. Here’s how you can protect yourself from fraud in the wake of disaster.

Understanding the risks

The wind and water damage from major storms can be significant and widespread. This creates an opportunity for deceitful contractors who may approach you unsolicited, offering remediation, restoration and rebuilding services. While most contractors are legitimate and trustworthy, some may engage in fraudulent practices that could lead to significant financial losses.

Do your research

In dealing with contractors, answering “yes” to any of the following questions should be a red flag:

• Unsolicited offers: Have you been inundated with unexpected visits or calls from random contractors offering help?
• Claim handling offers: Did any contractor propose to fix your damages and also offer to handle your insurance claim? Be cautious; they might be acting like an unlicensed public adjuster and trying to create a rift with your insurer.
• Speeding up the demolition process: If a contractor proposes to begin demolition before an adjuster's inspection, they may be attempting to do work that does not need to be done.
• Deductible deals: Did a contractor suggest they could “handle your insurance deductible” or propose fixing unrelated items?
• Payment practices: Were you pressured into making a hefty cash payment upfront or to give a large deposit? Requesting full payment before work completion should set off alarms.
• Licensing and insurance: Did they avoid showing proof of insurance and professional licensing? Did they skip getting the necessary permits?
• Reference checking: Did they demand your personal information before you could verify their references?
• Written contracts: Did they neglect to provide a clear, detailed written contract outlining the work, costs and timelines?
• Assignment of benefits: Were you coerced into signing an “Assignment of Benefits” (AOB)form? This could give the contractor too much power in your dealings with your insurance company.
• Out-of-state contractors: Is your contractor based out of state? While it’s not always bad, dealing with out-of-state contractors can complicate any repair issues that arise.
• Reference verification: Did you skip checking their references, or were those references questionable?

Common scams

Contractor fraud can manifest in various deceptive practices, including:

• Bid rigging: Colluding contractors may manipulate bids to secure contracts at inflated prices.
• Bait-and-switch tactics: Contractors may promise low-cost materials but deliver inferior or more expensive options.
• Phantom materials: Billing for materials that were never purchased or used.
• Inflated invoices: Charging excessively for labor and materials.
• Poor-quality workmanship: Failing to meet required standards or pushing for unnecessary repairs to inflate costs.
• Insurance fraud: Inflating damage estimates or submitting false damage reports.

What to do if you suspect fraud

If you suspect you have fallen victim to contractor fraud, it’s essential to act quickly. Gather all documents related to the work performed, including contracts, estimates and invoices. Report any suspicious activity to your insurance company and local authorities. Remember, many victims feel embarrassed about being scammed, but it’s crucial to report fraudulent behavior to protect yourself and others.

Final thoughts

If you’ve experienced storm damage, staying informed and cautious is your best defense against contractor fraud. By asking the right questions and remaining vigilant, you can protect yourself and ensure your organization receives the quality repairs it needs. Trustworthy contractors will welcome your inquiries and provide transparent information. Stay safe, and don’t hesitate to reach out to Church Mutual® Customer Service at 800-554-2642 if something feels off. Your organization’s well-being and financial security may depend on it.