FIVE TRICKS OF A CON ARTIST
Here are five ways that scam artists can get you to part with your hard-earned money against your better judgment. Some of the following information was provided by the Attorney General of the State of Texas and can be viewed here.
- They give you something for nothing - When someone you don't know well gives you something for nothing, be alert. Be aware of the feeling of obligation that the other person has created in you. Is that person manipulating you into buying or doing something that is not in your best interests? The offer of a "free gift" sets you up for a high-pressure sales pitch. Many consumers part with large sums of money because they accepted something up front.
- They make you like them - Con artists will spend considerable time befriending their intended victims. They often select individuals who live alone, are elderly, or who are otherwise vulnerable, cultivating their trust and affection. Con artists are often attractive and look professional. They may use flattery, making their intended victims feel appreciated, listened to, and cared about. These people are often quite good at picking up on people's personal interests, beliefs and preferences solely for the purpose of pretending to have these things in common. If someone is trying to sell you something, or trying to get you to do something, stop and ask yourself how much you trust this person. Be aware that the person may have created a good impression very deliberately in order to take advantage of you.
- They make you think it's now or never - This is just about the oldest trick in the book. The seller tells you that an offer is good for a limited time only• it's the chance of a lifetime, and supplies are limited. Every high-pressure sale is made in an atmosphere of urgency: hurry, don't wait, don't think, it's a golden opportunity, and you would be a fool to miss it. Your natural impulse is to grab the opportunity. Be aware that the appearance of fleeting availability may make you feel compelled to buy. Recognize it for what it is: a feeling deliberately caused by a common sales tactic. The offer is hardly ever the once-in-a-lifetime opportunity the salesperson would like you to think it is.
- They say they're going to make you rich - It is impossible to be prepared for all the different stories cons will make up to explain how you are going to come into a fortune. The main thing is, a perfect stranger tempts you with a promise of riches that will make all your problems go away. They may even ask whether you want cash or a direct deposit in your bank account. But the hard reality is that you are going to be the first one to write a check. You will find you need to pay a fee, a cost of wire transfer, insurance, tax or some such thing in advance. Don't do it! You are the intended victim of a cruel and costly hoax and don't give out your bank account number.
- They make you believe it worked for others - Word of mouth is an excellent source of information for any consumer. Anyone hiring a contractor, for example, should ask for the names of other customers to call for references. However it is important to note that testimonials are only useful if they are from other real, unbiased consumers who can be contacted independently. A collection of written testimonials provided by the seller (even if it includes real-looking names, addresses and photographs) is another matter. It could be real, but it could be fake. Testimonials and references only count if you can talk to real people independently of the seller. Also be aware that when you see that other people have accepted something, there is a natural tendency to relax and simply trust their judgment . But if everybody just believes everybody else, you could all be duped together. This often happens with investment frauds. They are looking out for themselves, not for you! The bottom line: con artists make you trust them. "Con" is short for confidence. The con artist's art is making you feel confidence - in him or her and what they tell you. Con artists get what they want from you by winning your trust and establishing their own credibility in your eyes. They are experts at using your natural impulses and reactions against you.
Unfortunately, in the aftermath of a disaster, not everyone that offers assistance have good intentions or pure motives. Scam artists often swarm to disaster areas to prey upon disaster survivors that may be vulnerable. These "scammers" look for ways to victimize people (especially the elderly).
Some of the most common scams are perpetrated by fly-by-night home repair contractors or "storm chasers" offering home repair, roofing replacement, water extraction, clean-up and debris removal, board ups, etc.
The following is a partial list of scams to be aware of:
HOME REPAIR AND CONTRACTOR SCAMS
Be very cautious when contracting for repairs, especially when solicited by door-to-door salespeople or telemarketers, responding to mailers, door hangers, or other forms of uninvited offers of services. Before hiring a contractor, consider the following tips:
Contact your insurance company first
If you have insurance, contact your agent to inspect your property and determine if the damage is covered by your policy. Never let a contractor discourage you from contacting your insurance company. Do not sign a contract for repairs until you and your insurance adjuster have agreed on the costs. Never let a contractor interpret the insurance policy language and beware of any contractor who offers to increase your damage assessment.
Find out who you are dealing with
Ask to see the salesperson's driver's license and write down the license plate number of their vehicle. Take note of company logos, names, addresses, phone numbers or identifying information. Be especially suspicious of unmarked vehicles.
Be careful when inviting strangers into your home
If you live alone, particularly if you are a woman, a senior citizen, or someone with disabilities, have a family member or friend with you when you meet with solicitors or contractors. Preferably have an adult male present before meeting with any strangers. It's also a good idea to put valuables like jewelry, money, weapons, keys, or personal information in a safe place. After the salespeople leave, check your doors and windows to make sure they're locked so no one can return later and gain access.
Verify the identity and validity of any company you deal with
Have any prospective contractors provide documentation along with their company information including licensing, workers' compensation and general liability insurance, bonding, physical business location (not just a P.O. Box), local phone number, years of establishment, etc. Verify that the contractor's insurance policies are current and in force by calling the insurance broker or agent named on the contractor's certificates of insurance. If the contractor is not insured, you may be liable for accidents that occur on the property or to the house or building.
BEWARE! False identification or business cards are easily made to look official. To find out if a contractor is licensed or to check a contractor's license number, contact the Contractors State License Board by calling 1-800-321-CSLB (2752) or visit their website at www.cslb.ca.gov. Deal only with local, licensed, and insured contractors.
Avoid possible price gouging
To avoid possible price gouging or inflated prices, get several estimates for the work and be sure the scope of the work includes everything needed or discussed. Be sure the work proposed is detailed to avoid being charged extra for work that should have been included.
Don't be fooled by discount offers
Beware of contractors that offer bargains or discounts because they have "leftover materials." This may be a sign that another consumer paid for the materials and the contractor failed to leave the materials, give proper credit, or that the materials may be stolen.
Beware of high pressure sales tactics
Don't allow salespeople pressure you into contracting for repairs claiming they are urgent. The salesperson should be willing to leave the contract with you so you can read it carefully on your own time. If anyone rushes you or tries to make you sign on the spot, or will not leave a copy for you to study, you should be suspicious of that person and the contract.
Get current local references
Get a list of at least five local references with phone numbers and addresses of projects where similar work has been done and check them out in person. Don't rely on calling only. If the phone numbers provided with the references are fake, you could be directed to someone impersonating a satisfied client. Ask to see a couple projects that are currently in progress or recently completed. Avoid out-of- town businesses. This may help keep the contractor accountable to perform warranty work and/or fulfill any other obligations. Call the Better Business Bureau to check if there are any complaints filed against the company.
Insist on a written contract
Get everything in writing. Here are a few guidelines to follow:
- Be sure the contract includes a notice of cancellation, giving you the right to change your mind within three business days. Federal law gives consumers a three-day "cooling off' period for unsolicited door-to-door sales of more than $25
- A complete contract should clearly state all the tasks to be performed, all associated costs, payment schedule, start and completion dates, and all other elements required to comply with local, state, or federal laws
- Avoid paying large down payments and never pay 100 percent up front
- Never sign a blank contract or one with blank spaces. Doing so could allow the addition of unacceptable terms later on
- Make sure the contract clearly states who will apply for the necessary permits or licenses
- Do not "deed" or "transfer title" to your property or sign a promissory note secured by your home
- Be sure that any guarantees are written into the contract. The guarantee should clearly state what is guaranteed, who is responsible for the guarantee and how long the guarantee is valid
Remember, a guarantee or warranty may only be good as long as the contractor is in business.
- If you are asked to sign a credit check application, read the form carefully and make sure it does not bind you to anything. Make sure it really is a credit check and not a contract
- Don't sign a final completion notice before the work is completed to your satisfaction and all subcontractors have been paid
Consult with an attorney BEFORE signing any contracts Be sure you clearly understand what you are about to sign. If you have any questions or doubts, consult an attorney before signing. When you sign a contract for home improvements, he contractor may be able to place a lien on your property. If you fail to make payments, the contractor may be able to sue you in court and take away your home.
DEBRIS CLEANING SCAMS
Don't be in a hurry to remove the debris
There are individuals who may offer to remove debris from your property, asking for significant deposits and then disappearing with your money. Sometimes, they may remove the debris but dump it on a neighbor's property, park, or playground. If this happens, you may be responsible for the costs of removal and any penalties attached. Be sure you know where the debris is being taken and provide payment only after the job is completed.
PHONY INSPECTOR SCAMS
Beware of phony inspectors
If you have not called for one, be very careful if someone comes to your door offering to inspect your property. Do not give personal information such as Social Security and bank account numbers to individuals claiming to be affiliated with the Federal government. FEMA inspectors never require this information. FEMA will request an applicant's Social Security or bank account number during the first phone call when the applicant calls FEMA's registration line. On any follow-up calls, a representative may ask for the last four digits of your Social Security number. If you didn't initiate the phone call, do not provide sensitive personal information-it could be a scam. A FEMA or U.S. Small Business Administration (SBA) shirt or jacket is not absolute proof of someone's affiliation with the government. Verify utility or building inspectors identification and a phone number to confirm if they work for an authorized agency. Do not allow inspections to your property when you are not home. Some contractors have been known to cause damage intentionally during an inspection, so take photos before, during, and after an inspection. FEMA inspectors only verify damage and do not hire or endorse specific contractors to repair damage.
FORM COMPLETION SERVICE SCAMS
People impersonating FEMA or SBA officials Beware of scam artists charging a fee to help you complete disaster assistance forms (such as FEMA or SBA), or obtaining assistance checks. These services are provided free through FEMA and the American Red Cross. FEMA and the U.S. Small Business Administration do not charge fees for information regarding filling out the SBA loan applications. Free help is available at a Disaster Recovery Center or by calling SBA's toll-free number, 1-800-659-2955 (TTY 1-800-877-8339). SBA does not charge closing costs on its low-interest disaster loans. FEMA does not charge for information that it gives out, such as a referral to a Disaster Recovery Center or information on how to apply for federal assistance. Apply free online at www.DisasterAssistance.gov or call 1-800-621-3362 (TTY 1-800-462-7585).
Water Testing & Purifier Scams
Avoid offers for "free" home water testing Fraudulent firms may try to sell you overpriced or useless water-treatment devices by offering to test your water for free and then falsely declaring it to be unhealthful. If you're on the public water system, your local water utility office can tell you about water safety problems and what to do. The health department can answer your questions about private wells. If the seller claims the water treatment device can remove contaminants, don't buy it until you find out if the seller is properly registered and the treatment system is properly certified with the state department of public health. You should know that no single device can solve every water quality problem.
FAKE CHARITY SCAMS
Be careful who you give money to
During and after a disaster, it is common to hear pleas for donations. A charitable scam occurs when donations to what is believed to be a worthy charitable cause ends up in a scam artist's pocket. Many bogus charities have names that sound similar to long-established charities. Don't be fooled. Give to charities you are familiar with that work in disaster assistance. Beware of telephone solicitors who are unwilling to give their name and call back number or who will not send written materials. Many times scam artists will set up a web site that has a name very similar to well-known charities. Some will set up sites that look identical to the official charity's web site, but will have a different web address (URL). Look to see if the web site address ends in .com instead of .org. Most charitable organization's sites have a .org address. Here are a few more tips:
- Avoid giving personal data such as social security numbers, dates of birth, and bank account information to any organization seeking donations
- Avoid organizations that offer to forward your donation for a "processing fee"
- Beware of organizations that seek a fee to help locate lost or displaced family members
- Be wary of out-of-state organizations, especially if their only address is a P.O. Box
- Avoid cash donations and if you decide to donate, make checks payable to the organization, not to an individual and never give money to anyone sent to pick it up
- Don't respond to unsolicited/spam emails including clicking links or attached images in those messages. The links could contain a computer virus.
Check the history or identity of any charitable organization with the following agencies:
If you believe you have been approached by a scam artist, or have been encouraged to fabricate an insurance claim, here are some agencies you can call to report it:
- The National Insurance Crime Bureau Hotline at 1-800-TEL-NICB (l-800-835-6422). You may also text your information to TIP411, keyword "FRAUD" and remain anonymous if you so desire. To learn more, visit www.nicb.org
- The FEMA Fraud Hotline at 1-800-323-8603. You may also send an email to DHSOIGHotline@dhs.gov Complaints may also be made via the FEMA Helpline at 1-800-621-3362 (TTY 1-800-462-7585)
- The National Disaster Fraud Hotline, toll free, at (866) 720-5721 or the Disaster Fraud e-mail at firstname.lastname@example.org. The telephone line is staffed by a live operator 24 hours a day, seven days a week
- Your state or local law enforcement officials or consumer agencies
For more information on disaster scams, visit Federal Trade Commission's website here.