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Gulf States Post Scam Alert in Wake of Gustav

Evacuees warned to watch out for price gouging and fraud

September 4, 2008
Now that one storm is over, law enforcement officials in states impacted by Hurricane Gustav are warning consumers to prepare for a wave of scams.

"Unfortunately, con artists prey on people who are down on their luck," said Mississippi Attorney General Jim Hood. "That's why it pays to arm yourself with the knowledge of their scams and learn how to protect yourself up front."

One of the largest immediate concerns for evacuees has been price gouging, according to phone calls in to the Attorney General's Office. Price gouging is when someone charges exorbitant and unjustified prices for products or services that disaster victims have little choice but to buy, such as gas, water and generators.

"In a state of emergency, businesses cannot increase their profit margins and they may raise their prices ONLY to cover increased costs," said Hood. "They must be able to justify that any rise in price is a direct result of increased cost in providing the product to the public."

There's a similar emphasis on preventing price gouging in neighboring Louisiana, which bore the brunt of Gustav. Louisiana Attorney General James D. "Buddy" Caldwell says his office is taking a tough stance toward alleged price gougers.

"We have our investigators checking and documenting pre-storm prices at all types of businesses especially gas stations, to make sure their prices stay relatively the same as before the storm," he said. "Businesses have been very cooperative, welcome our involvement and are helping us police competitors."

Cases of home repair fraud also follow natural disasters. Homeowners repairing damage are looking for reputable contractors so demand is higher than usual. Hood offered some tips to avoid being taken advantage of:

• Always get your contract in writing.

• Get at least two estimates.

• Ask for references and actually talk to those customers.

• Ask to see state or local permits and licenses.

• Don't give contractors money up front.

• Contact the Mississippi Board of Contractors to verify if the contractor is licensed.

• Buy materials yourself, if possible. It can also help save costs.

• Get receipts for all repair payments, including those paid in cash.

• If you are writing a check, make it out to the name of the company rather than a worker.

• If you are suspicious, do not hire the worker, sign a contract or provide money.

• Get as much information as possible and report your concerns to your local law enforcement agency.

"These types of cases take a while to manifest after a storm," said Hood. "It can be a long tedious process for the victim so it really pays to be a smart consumer. Get everything in writing, take photos of your contractor and their vehicle and vehicle tag. A legitimate contractor isn't going to be bothered by such actions."

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