NICB Warns New Orleans Tornado Victims of Scams

As the New Orleans area recovers from the damage caused by a string of powerful tornadoes, the National Insurance Crime Bureau (NICB) reminds consumers that in the weeks ahead, homeowners in disaster areas should be alert to the potential for fraud by unscrupulous contractors and home repair businesses.

After a disaster, contractors often go door-to-door in affected neighborhoods offering clean up and/or construction and repair services. Most are reputable, but many are not. One common scheme is to pocket a down-payment and then never show up for the job, or never complete a job that was started. Another scheme is to use inferior materials and perform shoddy work that is not up to code in order to increase profit.

NICB has personnel in the affected areas assisting our member insurance companies and a video of the area is available here.

“If you didn’t request it, reject it”

Almost all of these scams are unsolicited—they begin with a visit from a contractor who seeks to help victims rebuild. That is why NICB recommends that “if you didn’t request it, reject it.” Before hiring any contractor, call your insurance company. Your insurance company will honor its policy so there is no need to rush into an agreement with a contractor who solicits your repair work—especially when you did not request it. NICB suggests you consider these tips before hiring a contractor:

* Get more than one estimate.

* Get everything in writing. Cost, work to be done, time schedules, guarantees, payment schedules and other expectations should be detailed.

* Demand references and check them out.

* Ask to see the salesperson’s driver’s license and write down the license number and their vehicle’s license plate number.

* Never sign a contract with blanks; unacceptable terms can be added later.

* Never pay a contractor in full or sign a completion certificate until the work is finished and ensure reconstruction is up to current code.

* Make sure you review and understand all documents sent to your insurance carrier.

* Never let a contractor pressure you into hiring them.

* Never let a contractor interpret the insurance policy language.

* Never let a contractor discourage you from contacting your insurance company.

Consumer Resources

* For a free brochure with tips to avoid post-disaster fraud, click here.

* For useful checklists, including how to spot flood and salvage vehicle scams and post-disaster contractor repair schemes, click here.

* For free consumer access to the vehicle salvage records of participating NICB member insurance companies who collectively provide 88 percent of the auto insurance in force today, access NICB’s VINCheck.

Oklahoma Efforts Limited Fraud Following 2013 Moore Tornado

Unprecedented planning by state and local authorities, law enforcement and the insurance industry established what is being called a national model for protecting the public from fly-by-night contractors in the aftermath of a natural disaster.

According to the National Insurance Crime Bureau (NICB), preparation in advance of the F-5 tornado that devastated the city of Moore and surrounding areas in May 2013 resulted in a well-coordinated effort to ensure that roofers and other contractors who swarmed into the area in the hours and days after the storm were properly licensed, insured and authorized to work in the area.

Local police assisted the Oklahoma Insurance Department Fraud Unit in patrolling the area and keeping suspected fraudulent out-of-state contractors from doing work unless all protocols were followed.

For an update from Oklahoma, watch this video.

Oklahoma City was the site of the recent 2016 National Tornado Summit where Oklahoma Insurance Commissioner John Doak told NICB, “It’s much easier to fight fraud on the front end rather than on the back end.” Doak and others said the insurance industry did a highly commendable job of responding to the catastrophe and paying claims as quickly as possible. However, some homeowners who signed contracts or turned over money to contractors before the work was done have found themselves out of luck after the insurance claim money was taken by the contractor. He said insurers have begun issuing bank debit cards to policyholders in an effort to provide funds as soon as possible, while at the same time allowing the victims to avoid turning over their claims check to a possible scam artist.

Thanks to the planning efforts, the number of suspected fraud cases has been far less than expected in the aftermath of such a devastating storm. But now, nearly three years later, the Oklahoma Attorney General’s Office is seeing a disturbing trend.

“At this point and time, it is local contractors,” said Julie Bays, Chief of the Consumer Protection Unit. “Contractors who have set up shop here or out of state contractors who have established a local office, have told homeowners who have already paid out funds that the work is going to get done, but it never gets done.”

Bays says many homeowners are now finding that they have liens filed on their property by subcontractors who may have purchased supplies or done some repair work, and were never paid by the general contractors. One such case led to the extradition of a contractor who had fled to Kentucky. He was brought back to Oklahoma to face charges of embezzling $170,000 from storm victims.

The NICB is also working with its member companies and law enforcement on cases of alleged overbilling and charging insurers for work that was never done. “It’s a very competitive business, so some contractors will cut corners or submit false claims in order to get a customer’s business and their insurance money,” said NICB Special Agent Mark Wenthold.  “In a time when the insurers are doing their best to help the victims, they see the insurance industry as a soft target.”

As the spring tornado season arrives, NICB offers these tips before hiring a contractor:

  • Get more than one estimate.
  • Never let a contractor pressure you to hire them.
  • Never let a contractor interpret the insurance policy language for you.
  • Never let a contractor discourage you from contacting your insurance company.
  • Get everything in writing, including cost, work to be done, time schedules, guarantees, payment schedules and other expectations.
  • Demand references and check them out.
  • Ask for and record the salesperson’s driver’s license and vehicle license plate numbers.
  • Make sure to review and understand all documents sent to your insurance carrier.
  • Never sign a contract with blanks to avoid unacceptable terms being added later.
  • Never pay a contractor in full or sign a certificate of completion until the work is finished and you have verified that it meets code requirements where you live.
    f-5-tornado-moore-oklahoma-in-2013-3-HR

    The F-5 tornado that struck Moore, Oklahoma in 2013 resulted in an onslaught of potentially unscrupulous contractors into the area. Local and state authorities were praised for keeping them out of the area and limiting the amount of insurance fraud committed against victims.

    moore-tornado-rebuilding-and-repairs-continue-4-HR

    Nearly three years after the Moore tornado, rebuilding and repairs continue. Some contractors are being investigated by authorities for failing to complete the work or committing insurance fraud.

On the Lookout For Fraud in Tornado Damaged Areas

The Dallas Morning News recently went out with the Texas Department of Insurance and witnessed firsthand their fight against roofing scams after the Dec 26th tornadoes hit the Dallas area.

Roofers

Workers are removed from a roof in Rowlett, TX for not having a permit.

As we reported yesterday, after a disaster, contractors will often go door-to-door in neighborhoods that have sustained damage to offer clean up and/or construction and repair services. Most of these people are reputable, but many are not. The dishonest ones may execute schemes to defraud innocent victims. One common scheme is to pocket the payment and never show up for the job, or never complete a job that was started. Another scheme is to use inferior materials and perform shoddy work that is not up to code in order to pocket more profit.

Last year the TDI received 15,000 complaints regarding insurance fraud.

The best part is that roofers are not the sharpest shingles in the box. They don’t realize as they are being interrogated by TDI police that the state insurance department has no regulatory authority over them.

Here’s a video of the disaster area as law enforcement and TDI officials were on the lookout for potential fraud.

Texas Storm Victims Warned About Post-Disaster Scams

DES PLAINES, Ill., Jan. 7, 2016 –  As Texas recovers from recent storms, the National Insurance Crime Bureau (NICB) is working with law enforcement agencies, the Texas Department of Insurance and insurance companies to warn victims about post-disaster rebuilding scams.

TexasTornado1

Tornado damage in Rowlett, TX

After a disaster, contractors will often go door-to-door in neighborhoods that have sustained damage to offer clean up and/or construction and repair services.  Most of these people are reputable, but many are not.  The dishonest ones may execute schemes to defraud innocent victims.  One common scheme is to pocket the payment and never show up for the job, or never complete a job that was started.  Another scheme is to use inferior materials and perform shoddy work that is not up to code in order to pocket more profit.

Almost all of these scams are unsolicited-they begin with a visit from a contractor who seeks to help victims rebuild.  That is why we say, “If you didn’t request it, reject it.”  If you think you might have damage from a storm, call your insurance company first.  Your insurance company will honor its policy so there is no need to rush into an agreement with a contractor who solicits your repair work-especially when you did not request it.

TexasTornadoRooferUnlike other states, Texas does not require a license for a roofing contractor nor is one required for solicitation. Local jurisdictions, however, may impose certain requirements before contractors can solicit work within their boundaries. One example is the City of Garland that requires anyone soliciting for the purpose of selling or offering to sell goods or services, must first retain a solicitation permit through the Garland Police Department.

NICB was on site in the disaster area this week as law enforcement and Department of Insurance officials were on the lookout for potential fraud.

“Fraud is an unfortunate reality in post-disaster environments,” said NICB President and CEO Wehrle. “As the recovery in Texas gets underway, fraudsters are already converging on the affected areas in order to scam disaster victims out of their money while promising to do repairs. The last thing victims of disaster need is to be victimized again.”

NICB suggests you consider these tips before hiring a contractor:

· Get more than one estimate

· Get everything in writing.  Cost, work to be done, time schedules, guarantees, payment schedules and other expectations should be detailed

· Demand references and check them out

· Ask to see the salesperson’s driver’s license and write down the license number and their vehicle’s license plate number

· Never sign a contract with blanks; unacceptable terms can be added later

· Never pay a contractor in full or sign a completion certificate until the work is finished and ensure reconstruction is up to current code

· Make sure you review and understand all documents sent to your insurance carrier

· Never let a contractor pressure you into hiring them

· Never let a contractor interpret the insurance policy language

· Never let a contractor discourage you from contacting your insurance company

Another potential scam arising from the storms are flood vehicle resales. Buying a flood vehicle is not illegal, but misrepresenting a flood-damaged vehicle as one that is not could be a crime exposing the seller to potential criminal charges. More importantly, unknowingly buying a flood-damaged vehicle may put you and your family in physical and financial danger. A vehicle’s electronic systems are often destroyed from prolonged exposure to water rendering many of its safety features inoperable.

In these situations, efforts to recover your money from the seller are seldom successful since these scam artists rarely use legitimate identifying and contact information. In many cases, buyers are left with a useless vehicle and a loan that they still must repay.

For free consumer access to the vehicle salvage records of participating NICB member insurance companies who collectively provide 88 percent of the auto insurance in force today, access NICB’s VINCheck.

Consumer Resources

· For a free brochure with tips to avoid post-disaster fraud, click here.

· For useful checklists, including how to spot flood and salvage vehicle scams and post-disaster contractor repair schemes, click here.

Anyone with information concerning insurance fraud or vehicle theft can report it anonymously by calling toll-free 800-TEL-NICB (800-835-6422), texting keyword “fraud” to TIP411 (847411) or submitting a form on our website. Or, download the NICB Fraud Tips app on your iPhone or Android device.

Top Insurance Fraud Stories for April 20, 2015

Here are the top fraud stories in the news today:

* Michigan Auto Insurance Bills Passed by Senate (Insurance Journal)

* Alabama ranks No. 1 in most violent tornadoes (AL.com)

* BMX bike racer caught on camera admits defrauding state (Kitsap Sun)

* Police Chief Busted for Insurance Fraud in Northeast Alabama (WDEF)

* Man Accused of Insurance Fraud for Alleged False Claims (JDNews)

Tornadoes Rip Through the Midwest

Screen Shot 2015-04-10 at 8.38.59 AMAfter a disaster, contractors and others will often go door-to-door in neighborhoods which have sustained damage to offer clean up and/or construction and repair services. Most of these business people are reputable, but many are not. The dishonest ones may execute schemes to defraud innocent victims.

One such scheme is to pocket the payment and never show up for the job, or never complete a job that was started.  Another scheme is to use inferior materials and perform shoddy work not up to code in order to pocket more profit.

Almost all of these scams begin with an unsolicited visit from a contractor.  That is why we say, “If you didn’t request it, reject it.”  If you have damage from a storm, contact your insurance company first.  Your insurance company will honor its policy and will cover you for losses so there is no need to speak with a contractor who solicits your repair work—especially when you did not request it.

View our disaster fraud brochure as well as our “After the Storm” video for more tips.