Beware of "Katrina Scams"
Officials nationwide are warning people to beware of opportunistic scams in the wake of Hurricane Katrina.
The North American Securities Administrators Association urged potential investors to be on guard against promotions touting profits from hurricane relief and recovery efforts in Louisiana, Mississippi, Alabama and Florida. For example, profit making deals in the oil-and-gas industry, investments in water-purification technology or energy-generating devices, and hurricane "clean up" enterprises should all raise red flags.
NASAA's Web site, www.nasaa.org, or state securities regulators should be contacted to see if any such proposal is on the "up and up," or is just the brainchild of an opportunistic scammer, or, as Securities and Exchange Commission spokesman John Nester described them: "...financial parasites who feast on human suffering."
Contributors should be very cautions when approached to donate money or goods to relief efforts. Scams involving charitable contributions run rampant during times of crises, and con artists know how to tug at the hearts of generous citizens.
To make sure that your donations are going to a reputable charity, check them out carefully.
There are a number of websites which feature important information on how to make your dollars count. Some of the sites even have links to reputable charities, so you can make an immediate, online donation.
- Scambusters.org, a reputable online "debunking" site, has an excellent guide on their website to help you avoid "Katrina Scams" and locate reputable charities.
- FEMA-approved organizations receiving and processing cash donations or enlisting volunteers. FEMA, the Federal Emergency Management Agency, became part of the U.S. Department of Homeland Security (DHS). FEMA is the branch of the government responsible for coordinating emergency efforts.
- FEMA–approved informational resources
- Network For Good: Network for Good is an "e-philanthropy," with the mission of connecting people to charities via the Internet. Founded in 2001 by the Time Warner Foundation and AOL, Inc.; the Cisco Foundation and Cisco Systems, Inc.; and Yahoo! Inc., Network for Good is an independent, nonprofit organization.
While these sites listed above provide a resource for you to research and select a reputable charity to give to, scam artists are reaching out to grab your money first.
If you have been approached, solicited or "cold-called" by any specific organization, check them out before you open your heart and your wallet. You can see if they are listed on the Internal Revenue's list of "exempt" organizations, which means they are IRS-approved charities with a 501(c)(3) tax-exempt classification, on http://apps.irs.gov/app/pub78.
In addition to the IRS site, another good resource, to check out a charitable organization, is the Better Business Bureau's Wise Giving Alliance, at www.give.org.
You should be aware that the devastation Hurricane Katrina has wrought has been in predominantly black communities in New Orleans, Alabama and Mississippi. In response, congregants of African American churches throughout the country are reportedly gathering donations and volunteers to provide relief for fellow churches and residents victims in that region.
Keep in mind that while most of these relief efforts are indeed genuine, faith-based scams are rampant, particularly in times of such crisis. Check to make sure that the outreach and credentials from a purported religious organization are both legitimate, by checking the IRS site for 501(c)(3) status.
Tips on Dealing With Insurance Claims:
Residents of areas besieged by Hurricane Katrina have not yet been able to evaluate the damage, to see if they even have a home to which they might return.
Families forced to flee Hurricane Katrina must wait until emergency officials give the all-clear return to their homes and businesses to assess the damage. But even then, experts caution that people must put safety first. The floodwaters have wreaked havoc. The media has reported human corpses that have not yet been retrieved. Once the waters have receded, the streets will be littered with debris of all sort, including corpses of animals, plus dangling electric power lines, and roofs and walls that could collapse.
As provided on the Associated Press web page, here are some tips from the Insurance Information Institute and the Property Casualty Insurers Association of America on how to deal with returning to the property and filing appropriate insurance claims:
- If holes have been torn in your roof or windows are broken, cover them as quickly as possible to prevent further damage. Keep all receipts for temporary repairs for possible reimbursement.
- Prepare a list of damaged articles. Retrieve any records, such as receipts, bills or photographs, to help establish the value of items that are damaged or destroyed.
- Don't get rid of damaged furniture or goods until an adjuster has seen them. If you do start cleanup before an adjuster arrives, take photographs or videos of the damage before you start working.
- Watch out for con artists and scammers, especially those who promise to repair the damage.
- Contact your insurance agent for information on how to file a claim. Or, if the agent can't be reach, contact the company directly via the Internet or phone. The Property Casualty Insurers Association of America has a list of the toll-free numbers of major insurance companies that families can call for help with hurricane claims. The Web site is www.pciaa.net.
Experts Warn of Katrina Identity Theft
Con artists never miss an opportunity to maximize a disaster. Now, experts are warning of possible rise in identity theft as a direct result of Hurricane Katrina.
With homes destroyed and people running for higher ground, many vital documents were not only left behind, but are literally floating through devastated New Orleans and other hard-hit cities. This includes drivers' licenses, credit cards, medical records, bank statements, Social Security cards and other personal documents.
While the Federal Trade Commission's identity theft program has not received any complaints yet as a direct result of the catastrophe, they believe that reports may start coming in after people have resolved the more pressing issues of finding reuniting with their families and finding shelter, food and medicine.
The FTC says that victims of the hurricane can take steps to avoid becoming victimized again, this time by identity scammers.
For example, survivors giving personal data to insurance adjustors or Federal Emergency Management Agency representatives should be certain they're dealing with legitimate individuals and imposters.
Once victims are able to get access to phones, Internet and mail, they should check their credit card and bank statements to see if there's been any unusual activity. They should also get copies of their credit reports to make certain no one has accessed their accounts.
The FBI also warned people wanting to donate money for Katrina survivors to beware of scammers who solicit online donations to lure victims into giving up credit card numbers and other sensitive information.
People who think their personal information has been misused should contact the local police and the FTC. The FTC site is www.consumer.gov/idtheft, or they can be reached by phone at 877-IDTHEFT.
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