Natural disasters are damaging and often unavoidable events that change the lives of hundreds and thousands of people. While many disasters can bring people and communities with good intentions together, they can also attract opportunistic fraudsters. Since the last thing victims of a disaster should have to deal with is not getting the help and funds they need to rebuild their lives, the ACFE has provided resources for how to avoid common frauds related to natural disasters.
How it happens: A person or group pretends to be a legitimate philanthropic entity collecting funds for victims of a disaster. They solicit the public for money, which never ends up going to the intended recipients.
How to avoid it: Do your homework — search a charity evaluation site for the name of the group you are wishing to donate to, such as Charity Navigator or GiveWell. Running an online search for “scam” and the name of the charity might also bring up revealing results. Beware of charities with little to no history and take note of the method they ask you to contribute. If they’re asking for cash, wire transfers or checks made out to a single person, look instead for a way to donate to a larger, recognized organization through secure online means.
How it happens: Individuals pose as contractors and go door to door in affected areas, and promise to fix damage sustained from the disaster. They often ask for large deposits under the guise of buying supplies before the repairs start, then never return to begin work.
How to avoid it: If your property has been damaged in a natural disaster, do research online to find trusted contractors or property repair companies. Look for organizations that have an established history of working in your area and read customer reviews. Contact the company directly through published contact information as opposed to through an individual who may be posing as part of that business.
How it happens: When disasters strike, most property owners will file claims with their insurance companies for the damage incurred. Some individuals or organizations see this as an opportunity to file claims that are either inflated or completely fabricated in order to profit. Some fraudsters even intentionally damage property after a disaster in order to receive a higher payout.
How to avoid it: Anti-fraud professionals in the insurance industry should pay close attention to claims filed after major disasters to look for any discrepancies or red flags. If a small 200 sq. ft. clothing boutique is filing a claim for $2 million worth of floor display supplies, it’s unlikely they could have had enough space to necessitate that amount of materials. Even though stress may be high at this time, claimants should be able to provide some sort proof of purchase or use of the property they are seeking damages for.
For more information on mitigating disaster fraud, or to talk to experts on disaster fraud for media pieces, contact Sarah Thompson, public information officer, at
The National Center for Disaster Fraud
FEMA Waste, Fraud and Abuse Hotline
1 (800) 323-8603
Natural catastrophe and disaster fraud: Calamity criminals - Fraud Magazine
Fraudulent charities in the wake of disaster - Fraud Magazine
Financial statement fraud in the Katrina aftermath - Fraud Magazine
Charity fraud: To give or not to give - Fraud Magazine
How to avoid 'storm chaser' fraud after Harvey - CNN Money
Fraud among the threats for victims of Hurricane Harvey - NPR