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Scams, cons and price-gouging try to rip off NC storm victims

Scams, cons and price-gouging try to rip off NC storm victims


Disaster situations, like the one in Western North Carolina following Hurricane Helene, can be opportunities for fraudsters and scam artists to take advantage of victims’ pain and desperation. 

Asheville Police Chief Mike Lamb gave a sobering reminder of that fact at a Buncombe County press briefing on Wednesday.

“Another thing that unfortunately we are having is scammers,” Lamb said while providing updates on the work that the Asheville police force was doing in the aftermath of the storm.

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Lamb said the department had received several reports, particularly in the Patton Avenue area in West Asheville, of people going door to door saying they were there collecting donations and equipment for the hurricane relief effort. Those people, according to Lamb, were operating scams in an attempt to steal money and other supplies from Asheville residents under the guise of collecting donations.

The incident serves as a warning sign of various scams that may target victims of Helene or people wishing to help areas affecged by the storm in the coming days, from fake donation collections to insurance fraud to price gouging. Lamb provided tips for residents who may be at risk of such schemes.

“Make sure you’re verifying and checking for legitimacy of anybody that is soliciting funds or asking for donations,” he said.

“Another thing is if somebody comes to you and they ask to do repairs for you, they will never ask for full payment up front or even payment up front. A reputable company will do the work first and then get payment on the backside, and you can also check different reviews online to make sure it is a legitimate business that is coming to do the repairs for you.”

Insurance fraud, contractor scams

Gary Jackson, an attorney with the Durham Law Offices of James Scott Farrin, has extensive experience in consumer protection cases. He told Carolina Public Press that several different types of fraud are often taking place during disaster situations like the one in Western North Carolina.

The first is insurance fraud. In these situations, insurance adjusters who are hired to evaluate storm damage might make inaccurate claims in order to shift the liability from the insurance companies to the government.

Most insurance companies don’t offer flood insurance, because the amount they have to pay in claims settlements when floods happen typically is much greater than the amount they bring in through premium payments. So, the federal government has offered flood insurance through the National Flood Insurance Program since 1968.

“The federal flood insurance program provides money, but they don’t have adjusters,” Jackson said. “So they have to rely upon the homeowner’s insurers, like State Farm or Allstate, to do the adjusting for flood claims.”

In these situations, adjusters may underestimate the wind damage and exaggerate the flood damage to a home in order to shift the liability to the federal government’s flood insurance program. Jackson said these sorts of scams are considered forms of false claims against the government, wherein the financial burden for repairs is placed onto taxpayers.

There is also contractor fraud, where unqualified or dishonest contractors take advantage of desperate homeowners by overcharging for shoddy or incomplete work. These contractors may come from out of state or even from within the affected community, seeking to profit from the disaster through scams.

“I think it is pervasive because of the level of damage in some of these catastrophes, like what we’re seeing now in Western North Carolina,” Jackson said. “There’s a lack of professional ability to accommodate the needs for repairs or replacement, and there’s a profit incentive because people are desperate to get back into their homes.”

Jackson said residents should be particularly wary of these schemes because they are nearly impossible to litigate, especially if the contractor jumps town after receiving payment.

“If somebody comes from Texas to Asheville in a pickup truck and says ‘I can help fix your house,’ and they’re not competent or they don’t do enough and six months later there’s a problem, those folks are long gone,” he said.

The town of Black Mountain issued a statement Friday warning residents there about alleged scam operations, some of whom could be posing as FEMA representatives: “Ask all personnel to show identification badges. All FEMA support will be in identifiable uniforms or vests.”

AG’s office vigilant on price gouging

The North Carolina Department of Justice is monitoring complaints of price gouging related to the storm. Attorney General Josh Stein provided an update on those complaints in a press release on Friday.

The DOJ received 196 complaints alleging price gouging in Western North Carolina, according to the release. Most complaints were about hotel rates, grocery prices and fuel prices and were most frequently about businesses in Buncombe, Cleveland, Madison and Mecklenburg counties. Other complaints originated from Watauga and McDowell counties, according to an earlier update on price gouging on Monday.

“I have seen firsthand the devastation people in western North Carolina are facing,” Stein said. “The people I’ve spoken with have more than enough to worry about as they recover and rebuild. The last thing they need is a scammer coming in to take advantage of their desperation.”

The release added that the Attorney General’s office has already sent four civil investigative demands related to the price gouging complaints. Under state law businesses cannot unreasonably raise the price of goods or services to profit from a state of emergency.

What if you’ve been scammed?

Lamb encouraged Asheville residents to report any suspicious activity to law enforcement in their area.

“If you get an instinct or you get that gut feeling that something isn’t right, please call 911 and report the situation so that we can investigate and see if that person is trying to conduct a scam or not,” he said.

Jackson said victims of scams may have the option to pursue litigation, dependent on the situation.

People can file price gouging complaints with the North Carolina Department of Justice at 1-877-5-NO-SCAM or at the DOJ’s price gouging webpage.

Editor’s note: This article has been updated to include new information about scam activities in Black Mountain.

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