Natural disasters, like Hurricane Florence that recently devasted the Carolinas, and Hurricane Michael, which is barreling into the Gulf of Mexico right now, bring out the best and, unfortunately, the worst in people. Generous, kind-hearted people jump into action when disaster strikes, offering monetary donations and other acts of charity. Other people, looking to take advantage of the situation, are also ready with a number of deceptive tools at their ready. From price gouging to fraudulent charitable solicitations to phishing scams, federal authorities warn consumers to be wary of such opportunists.

Price gouging

Price gouging occurs when businesses “charge too much during a time of crisis.” While rising prices are the natural supply and demand response of free market capitalism, charging an exaggerated price to take advantage of a crisis is something more nefarious. A number of states have laws in place to help protect residents facing dire situations in the aftermath of natural and manmade disasters. When the laws are in effect, they prevent businesses from artificially raising prices of products and services that are likely in high demand, such as food, gas and hotel rooms during a crisis.

Within days of Hurricane Florence pushing ashore, North Carolina officials reported they had received approximately 500 complaints that companies were violating the state’s anti-price gouging laws. Similarly, the South Carolina Attorney General’s office reported that it had received complaints of 118 businesses allegedly participating in price gouging activities. State and local authorities work together to investigate claims. Typically, businesses found guilty of price gouging activities are subject to civil penalties including monetary fines.

Fraudulent charitable solicitations

The Internal Revenue Service (IRS) has also warned consumers to think before you donate. Donors can use the free IRS online tool to research legitimate tax-exempt organizations. Charity Navigator, a nonprofit organization that evaluates other nonprofit organizations, and the U.S. Federal Telecommunications Commission (FTC) provide additional tips to help keep donors safe from fraud.

Research the soliciting organization if it isn’t familiar. Determine if it is registered as a public 501(c)(3) nonprofit organization by using the free IRS online tool or finding information about it on Charity Navigator’s online site. Try to identify the organization’s website to get a better idea about the group, what it supports and its track record.

In the social media age, donors should also verify the legitimacy of crowdfunding campaigns and other charitable causes that come up in their social media feeds. If the charity or campaign is not a registered 501(c)(3) donors should consider only giving to charitable causes created by people with one degree of separation.

Phishing scams

Fraudsters uses a variety of phishing scams or tricks to gain access to consumers’ sensitive and personal information. From phone calls conducted with a sense of urgency to malware-laden emails, many ill-intentioned individuals have perfected the art of preying on unsuspecting and generous consumers. Such scams are an ever-present danger in the digital age but, like other opportunists, cybercriminals will use a disaster to their benefit. The following tips from the FTC can help protect consumers’ identity from phishing scams.

  • Spot imposters. Scammers often pretend to be someone you trust, like a government official, a family member, a charity, or a company you do business with. Don’t send money or give out personal information in response to an unexpected request – whether it comes as a text, a phone call, or an email.
  • Do online searches. Type a company or product name into your favorite search engine with words like “review,” “complaint” or “scam.” Or search for a phrase that describes your situation, like “IRS call.” You can even search for phone numbers to see if other people have reported them as scams.
  • Don’t believe your caller ID. Technology makes it easy for scammers to fake caller ID information, so the name and number you see aren’t always real. If someone calls asking for money or personal information, hang up. If you think the caller might be telling the truth, call back to a number you know is genuine.
  • Don’t pay upfront for a promise. Someone might ask you to pay in advance for things like debt relief, credit and loan offers, mortgage assistance, or a job. They might even say you’ve won a prize, but first you have to pay taxes or fees. If you do, they will probably take the money and disappear.
  • Consider how you pay. Credit cards have significant fraud protection built in, but some payment methods don’t. Wiring money through services like Western Union or MoneyGram is risky because it’s nearly impossible to get your money back. That’s also true for reloadable cards (like MoneyPak or Reloadit) and gift cards (like iTunes or Google Play). Government offices and honest companies won’t require you to use these payment methods.
  • Talk to someone. Before you give up your money or personal information, talk to someone you trust. Con artists want you to make decisions in a hurry. They might even threaten you. Slow down, check out the story, do an online search, consult an expert – or just tell a friend.
  • Hang up on robocalls. If you answer the phone and hear a recorded sales pitch, hang up and report it to the FTC. These calls are illegal, and often the products are bogus. Don’t press 1 to speak to a person or to be taken off the list. That could lead to more calls.
  • Be skeptical about free trial offers. Some companies use free trials to sign you up for products and bill you every month until you cancel. Before you agree to a free trial, research the company and read the cancellation policy. And always review your monthly statements for charges you don’t recognize.
  • Don’t deposit a check and wire money back. By law, banks must make funds from deposited checks available within days but uncovering a fake check can take weeks. If a check you deposit turns out to be a fake, you’re responsible for repaying the bank.

Sources:
U.S. Computer Emergency Readiness Team (US-CERT)
Business Insider
The State
Internal Revenue Service
Charity Navigator
U.S. Federal Telecommunications Commission



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