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, local and state officials have warned disaster victims to take precautions and to be on the look out 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 referrals so you can speak directly with their prior customers to determine whether they were satisfied; and (5) when an individual shows up at your home ask for identification to verify that they are who they say they are. Additionally, whenever you have telephone calls with any person at a company or agency it is important to keep a log of the call for your records. You should include in the log the name of the person you spoke with, the date and time of the call and the subject matter of the call.

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” above at page 54). Get copies of everything you sign at the time you sign.

What is a public insurance adjustor and what should I look for if I decide to hire one?

It is generally recommended that you try and settle an insurance claim directly with your insurance company before you hire a public insurance adjustor. Your insurance company provides an adjustor to you at no charge. If you use the insurance company’s adjustor you still have the right to separately hire a public adjustor to help you. Public adjustors claim that they can maximize your insurance benefits by finding damage that an insurance company adjustor might not find. Public Adjustors 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 adjustor. It is always a good idea to rely on referrals from friends and family to determine which public adjustors are legitimate. If you decide to hire a public adjustor, make sure that they are licensed. Call the California Department of Insurance (CDI) at (800) 967-9331 for licensing verification and other information regarding public adjustors.

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” on page 9). 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.

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 that you 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?

You have certain legal rights that protect you from the harassment of a collection agency. For example, it is not permissible for a collection agent to threaten you with prison time or to in any way physically threaten you or your family or to threaten to come to your home. Additionally, collection agents can not disclose your financial status to third parties, such as your employer, without your permission. You may make a written complaint regarding a collection agency by contacting the following organization: Bureau of Collection and Investigation Services, 1920 20th Street, Sacramento, California 95814, (916) 445-7366.

What do I look for when hiring a moving company?

It is best to rely on referrals of moving companies from family and friends rather than hiring someone who simply appears at your door offering their services. In particular you should: (1) make sure the mover is licensed and in good standing by calling the California Public Utilities Commission at (800) 877-8867; (2) get an estimate of the cost of the move and how long it will take; and (3) make sure you understand their insurance limits and consider whether you should purchase additional insurance. You can file a complaint against a moving company online at www.cpuc.ca.gov or by calling (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 lists the property you are turning over to them; and (3) the storage company is licensed and bonded.

What do I look for when hiring an attorney?

It is important to always start with a referral from a trusted source. Especially 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 starting on page 54. To obtain a listing of State Bar certified referral services in other counties, you can call the State Bar at (415) 538-2250 or look them up on the internet at www.calbar.ca.gov/lrs. 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, under Public Service, Consumer Information, Pamphlets links. 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.

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.