5 Natural Disaster Scams To Watch For

By Riya V. Anandwala | March 30, 2011 AAA

Many people are constantly looking for ways to contribute to the victims of natural disasters, whether the disasters struck in their own neighborhood or the other side of the planet. But you need to be careful before writing a check to a lesser-known source that is collecting donations, or an insurance agency that promises to cover the heavy expenses for your damaged walls. Even in grieving period, scam artists are up to speed with their business - duping innocent people. (Find out how to protect yourself and your loved ones from financial fraudsters. Check out Stop Scams In Their Tracks.)

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After Hurricane Katrina took many lives, and negatively impacted many more, $1.4 billion in federal aid was reportedly used by fraudsters who disguised themselves as people associated with Katrina relief. Fake addresses as well as stolen Social Security numbers were used from dead victims to receive rental aide payments.

With the recent earthquakes and tsunami that hit Japan, a number of scammers are mushrooming on every nook and corner. The FBI and state officials are urging people to take a careful look at the charity organization before shelling out the dollars for donation. Here's a list of scams to watch out for.

Insurance Fraud
Usually the first concern people have after their house has been wiped off by a tornado, fire or a hailstorm is the money that will cost to fix the damages. At this time, fake insurance agents will jump on the opportunity, trying to sell you a coverage plan after the incident has occurred and encourage filing a claim. But that won't work. If you didn't have insurance at the time of the event, no insurance agency will cover your expenses.

A good way to escape such a scenario is to do some background research on the agency and ask for documents that confirm the agent's association with that particular company. If you're in a desperate situation, consult people who have been through similar situations and have them refer an insurance agent, rather than taking a chance on a possible fraudster. (Find out how to spot internet fraud and protect your hard-earned money. See Avoiding Online Investment Scams.)

Contractor Fraud
Along with the insurance agents, also be careful of contractors who show up at your doorstep following the accident. It is a growing trend that scammers pose as contractors - willing to begin work immediately.

Avoid contractors who ask for payment up front. After pocketing the money, the repair might turn out to be poor quality or they might even leave the work half way. Checking around and calling references will place you in a safe spot.

Fake Charity Organizations
Whether it is a hurricane, oil spill or earthquakes, victims who are without food and shelter need help. But your contribution is worth nothing if you don't invest time in researching the organization you decide to link up with.

In this case, your first step would be checking if your selected charity organization actually exists by visiting Give.org and CharityNavigator.org. However, this excludes some groups listed as churches.

A huge number of these organizations are registered with the Internal Revenue Service, which provides another way to check up on them.

E-scams
These are widespread and you definitely have one in your inbox. These scams might take the form of an email from group linking to a charity organization for a specific relief fund asking for donations. Do not fall for this emotional trap.


If you are interested in participating with an organization that you find online, try to contact them or gather information through another reliable source. In any case, do not give out your credit card or any account information as that can bite you later.

Facebook Scams
Not everything you see on your social media website is true and dependable. While this may not take away your dollars, it can harm your personal life. Scam artists have created pages promising "Japanese Tsunami RAW Tidal Wave Footage!" It not only updates automatic "likes" if you click on the link, but also asks for personal information from users.

The Bottom Line
While American Red Cross, World Vision and several reputed international organizations are your best bet for safe donations, many scammers are appropriating the name of these organizations.

Follow these three steps when you're approached by a possible natural disaster fraud: First, check the authenticity of the organization through rigorous efforts, avoid following email links - that can also corrupt your computer with viruses - and lastly, consider reporting fraudulent activities to your local police. (More than 30 million people were victims of fraud in 2007. Will you be next? Refer to Credit Scams To Watch Out For.)

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