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CONSUMER TIPS & FRAUD PREVENTION
Could I become a victim of fraud?
Unfortunately, after a disaster some people try to take advantage of victims by engaging in financial scams and frauds. In some cases these individuals and companies claim to be offering help by engaging in what may be legal acts but which in reality result in additional financial hardship to those already suffering. In the aftermath of the wildfires, you should take precautions and be on the lookout for financial scams and con artists.
What should I be doing to prevent a fraud or a financial scam?
The old saying applies: Things that sound too good to be true usually are. As a general matter, the following tips should be followed when hiring or contracting with anyone: (1) verify that the company or person is licensed with the appropriate regulatory agencies if the industry is subject to state licensing; (2) obtain multiple estimates of the cost of the service to be performed from different sources so you know that you are getting a fair price; (3) obtain estimates in writing; (4) ask for references so you can speak directly with prior customers to determine whether they were satisfied; (5) when individuals show up at your home, ask for identification to verify that they are who they say they are; (6) read all contracts or service agreements before signing; and (7) file complaints with the appropriate regulatory agencies if confronted with potential fraud or abuse. Additionally, whenever you have telephone calls with any person at a company or agency, keep a log of the calls for your records. You should log the name of the person you spoke with, the date and time of the call, and the subject matter of the call.
If you believe that someone is attempting to defraud you, contact the California Department of Consumer Affairs at (800) 952-5210 or file a complaint online at www.dca.ca.gov.
What if someone asks me to sign something?
You should look out for anyone that is in a hurry to have you sign a document or contract. A red flag should go up if someone says that you must sign right away in order to get a low price or a special deal. A person or company that is really trying to aid victims and/or provide legitimate services will not make such demands when asking you to sign documents but will want you to truly understand what you are signing. Most importantly, read everything before you sign it and make sure you understand what you are signing. Do not be afraid to ask questions about the meaning of the contract. Consider getting the assistance of a qualified attorney (if you do not have your own attorney, you may want to refer to “Lawyer Referral Services & Legal Aid”). Get copies of everything you sign at the time you sign.
What is a public insurance adjuster and what should I look for if I decide to hire one?
Public insurance adjusters claim that they can maximize your insurance benefits by finding damage that an insurance company adjuster might not find. It is generally recommended that you try and settle an insurance claim directly with your insurance company before you hire a public insurance adjuster. Your insurance company provides an adjuster to you at no charge. If you use the insurance company’s adjuster, you still have the right to separately hire a public adjuster to help you. Public adjusters are paid a fee or a percentage of your claim. It is important that you understand what the fees are and how they are calculated before you hire a public adjuster. It is always a good idea to rely on referrals from friends and family to determine which public adjusters are legitimate. If you decide to hire a public adjuster, make sure that they are licensed. Call the California Department of Insurance (CDI) at (800) 967-9331 or access the CDI’s website at www.insurance.ca.gov for licensing verification and other information regarding public adjusters.
What do I need to consider if I am offered a home loan?
Before you get a loan to rebuild your house, you should always shop around for different lenders to determine which one is offering you the best interest rates and the lowest fees. Before getting a loan from a private lender, always check to see if you qualify for any government assistance programs, such as FEMA, HUD programs, or assistance from the State of California (see “Housing: Repair or Rebuilding” ). Be on the lookout for “guaranteed loans,” when a person contacts you and “offers” a guaranteed loan for an upfront fee. Legitimate lenders do not guarantee that you will qualify for a loan before you complete an application and they run a credit check. Legitimate lenders may charge a small application fee but they do not promise that you will get the loan until they complete their review. Make sure that you are dealing with a licensed lender. The California Department of Corporations licenses most lenders and you should check with them to determine whether the lender is legitimate. They can be reached at (866) 275-2677 or online at www.corp.ca.gov.
What should I look out for when hiring contractors to do repair work on my house?
Problems with home repair contractors such as abandonment and shoddy work often happen after disasters. Watch out for door-to-door offers of repair services, and never provide the contractor with a cash deposit. You should also get a written contract that details every aspect of the work to be done. Before signing a contract with a contractor, be sure to check his or her license status and references. You can check licenses online at the California Contractor State License Board’s website, www.cslb.ca.gov. You can also file complaints at the same site. In addition, the CSLB has established a hotline where disaster victims can obtain more information: (800) 962-1125.
Is loan consolidation a good idea?
While the decision whether to consolidate loans or transfer loans to a new finance company depends on your particular situation and the terms being offered, you should be aware that some financial companies may try and take advantage of you during a disaster. Because of the disaster, you may not be able to pay your creditors on time. As such, you may be contacted by finance companies promising to consolidate your home mortgage, credit card debt, car loans, and repair loans. They will claim that such consolidation will lower your monthly payments and give you more time to pay the debt. Such companies often pressure you to sign multiple loan agreements without giving you a chance to review the documents or consult with an attorney. In many instances, these refinancings result in high fees, payments to bogus creditors, and defaults on the loan. You should carefully review the terms of the refinancing, verify that the company you are dealing with is legitimate and licensed, and have referrals from previous customers. It is also recommended that you hire an attorney to review the documents and provide advice.
Can I do anything about being hassled by a collection agency?
Creditors are not required to let you know that they are referring your account to a collection agency. However, you have certain legal rights that protect you from the harassment of a collection agency. For example, debt collectors may only call between 8 a.m. and 9 p.m. (They can contact your employer for certain information, as well as contact you at your work, however.) Debt collectors cannot use obscene or profane language or make threats to harm you or your property. There is no law that limits the number of calls that an agency may make, but repeated calls over a short period are prohibited if they would constitute harassment.
You can obtain more information about your rights with respect to collection agencies by consulting the California Attorney General’s website at: http://ag.ca.gov. Click on the “Consumers” link, then “Consumer Alerts, Info, & Complaints,” and then “Debt Collectors.” You can also file a complaint with the Federal Trade Commission. You can contact the Commission by mail at Consumer Response Center, Washington, DC 20580-0001; by telephone at (877) FTC-HELP; or through its website, at www.ftc.gov.
What if I am the victim of identity theft?
Identity thieves steal personal information and use it to obtain credit cards, loans, or bank accounts in other peoples’ names. When the bills aren’t paid, the victims may be held responsible for the charges.
Identity theft is likely to happen in the chaos following a disaster, because people may be forced to evacuate in a hurry, leaving personal information vulnerable. Identity thieves may also pose as authority figures to steal personal information or impersonate disaster victims to obtain FEMA checks or other emergency services.
You should never give your complete Social Security number, bank account number, or credit card information to anyone unless you are certain that the person actually is a representative of a legitimate organization.
If you believe that you are a victim of identity theft, you should: (1) contact the fraud department of the three major credit agencies to request a 90-day fraud alert — you can call Experian at (888) 397-3742, Equifax at (800) 685-1111, and TransUnion at (800) 888-4213; (2) contact your local police and report the identity theft — be sure to obtain a copy of the police report; (3) fill out the ID Theft Affidavit provided by the Federal Trade Commission at: www.ftc.gov; and (4) contact your creditors and request information about the fraudulent accounts. You can use the police report and affidavit to help prove that you were the victim of identity theft.
For more information, visit the California Office of Privacy Protection’s website at: www.privacyprotection.ca.gov.
What do I look for when hiring a moving company?
When hiring a moving company that you are unfamiliar with, you should: (1) ask for references; (2) make sure the mover is licensed and in good standing by calling the California Public Utilities Commission at (800) 877-8867 or by checking the index of licensed movers maintained by the Commission at their website, listed below; (3) get an estimate in writing of the cost of the move and how long it will take — oral or internet estimates are not binding; (4) know that if you do not get a written estimate, the moving company must provide a “not to exceed” price for all household moves; and (5) make sure you understand the moving company’s insurance limits and consider whether you should purchase additional insurance.
More information, including an updated list of licensed movers, information about maximum rates, and several consumer-protection resources, is available at: www.cpuc.ca.gov. Also, you can file a complaint against a moving company online at www.cpuc.ca.gov or by calling (415) 703-1216 or (800) 366-4782.
What do I look for when hiring a storage company?
Before you turn your belongings over to anyone for storage you should make sure that: (1) the storage company is legitimate and reputable, by talking with people who have use their services; (2) you have a written agreement with the storage company that lists what will be provided, the cost to you, and, specifically, the property you are turning over for storage; and (3) the storage company is licensed and bonded.
If the storage is for a period shorter than 90 days, you may direct complaints to the California Public Utilities Commission at www.cpuc.ca.gov or by calling (415) 703-1216 or (800) 366-4782.
What do I look for when hiring an attorney?
It is important to always start with a referral from a trusted source. If you do not have a trusted friend or family member who can refer you to an attorney, you may want inquire with a local lawyer referral service that has been certified by the State Bar of California. We have listed such certified services for the affected counties in the “Lawyer Referral Services & Legal Aid” section. To obtain a listing of State Bar–certified referral services in other counties, you can call the State Bar at (415) 538-2250 or (866) 442-2529 or look them up on the internet at www.calbar.ca.gov. Additionally, you may want to review the State Bar’s consumer pamphlets, “How Can I Find and Hire a Lawyer?” and “What Can I Do If I Have a Problem with My Lawyer?” which are located online at www.calbar.ca.gov. Click the “Public Service” link, then the “Consumer Information” link, and then the “Pamphlets” link. To order printed copies of the pamphlets, send an email to pamphlets@calbar.ca.gov or call (415) 538-2280 for more information. Finally, if you need to file a complaint against an attorney, you should contact the State Bar of California at (800) 843-9053 or (213) 765-1200 or visit their website at www.calbar.ca.gov and click on the “Attorney Complaints” link.
After a disaster can a seller of products radically increase the price to make a quick buck?
After the governor declares a state of emergency, it is illegal for businesses to increase the cost of certain goods by more than 10% unless they can prove it was based on an increase in their supplier’s price. The prohibition on price gouging applies to food, emergency and medical supplies, gasoline, repairs, and reconstruction. If you suspect price gouging, contact your local District Attorney or the California Attorney General’s Office at (800) 952-5225.