Consumer Column

Special Consumer Alert: Consumers Advised To Avoid Natural Disaster Scams
With areas of Northwest Louisiana impacted by severe flooding, Attorney General Buddy Caldwell warns consumers to be on the lookout for potential scams linked to fake charities or contractors seeking to cash in on the damage.

“While established charities shift into disaster response mode and seek donations to help residents, scammers also jump on the chance to cash in on sympathy for flood victims,” Attorney General Caldwell said. “Fly-by-night contractors often go door to door after natural disasters, offering to help victims clear debris, remove mold or repair homes.”

Attorney General Caldwell advises consumers to check out charities and contractors before writing a check or making an online donation.

“Louisiana property owners obviously want repairs done as quickly as possible, but it pays to take the time to do some research to ensure that a contractor is licensed and that the repair work will be done properly and at the right cost,” Attorney General Caldwell said. “Likewise, consumers and businesses want to make sure their contributions go to well-run relief organizations that are equipped to handle the challenge of assisting those in a disaster zone.”

Attorney General Caldwell’s tips for consumers and businesses looking for contractors to make repairs:

Get at least three bids. Be certain each contractor bids on exactly the same work. If one contractor bids on more work than others, make a note of it. All bids should be itemized and detailed.

Know the contractor. Get the name of the contractor’s insurer, and call the insurer to confirm coverage. Always require that the contractor show you proof of insurance such as workman’s compensation and general liability insurance. Find out the contractor’s address and verify it. Ask for references and inspect work done for previous customers when possible. Make sure the contractor is licensed through The Louisiana State Licensing Board for Contractors. You can search registered contractors by visiting the board’s website, www.lslbc.louisiana.gov.

Do not agree to a large down payment. A reputable contractor will not normally require a large down payment. A down payment should not exceed 10 to 25 percent of the total price. Better yet, accompany the contractor to the building supply store and pay the store for the materials yourself. Have the materials delivered directly to your home or jobsite rather than the contractor’s shop.

Get a guarantee and a contract in writing. Any contractor not willing to guarantee his or her work is not someone with whom you should be doing business. Accept no verbal agreements. Any changes in the contract should be in writing and initialed by both parties. Keep a signed, legible copy of the contract in a safe place.

Do not pay cash. Always pay by check or money order and keep a receipt. Write all checks to the company, not the individual worker. Make sure all subcontractors are paid to prevent a lien from being placed against your property.

Attorney General Caldwell also has tips on making charitable donations:

Verify charities by going to www.guidestar.org to find out if the charity is actually an IRS 501(c)(3) tax exempt organization.

Be wary of claims that 100 percent of donations assist victims. All charities have fund-raising and administrative costs. Even a credit card or text donation will involve, at least, a processing fee.

Be cautious when giving online to unfamiliar charities. Be wary of spam, or unwanted commercial email messages and emails that claim to link to a relief organization.

Find out if the charity has a presence in the affected areas. See if the charity’s website clearly describes what it can do to address immediate needs.

• Contact the Attorney General’s Charitable Registration section, the Louisiana Secretary of State’s Corporations Database and the Better Business Bureau before you donate.

For more information about contractor fraud and charity scams, or for other consumer-related information, call the Attorney General’s Consumer Protection Hotline at (800) 351-4889.




Coming soon, the attorney's general office seeks to provide a mechanism by which to take online payments for collections.