FEMA Warns of Scams

It has been almost five months since Hurricane Katrina destroyed Gulf Coast communities. Many residents in Mississippi are hiring contractors to complete repairs and cleaning projects in their homes and businesses as they recover from the disaster.

FEMA and the Mississippi Emergency Management Agency caution victims of the storm not to become victims a second time by falling prey to scam artists and disreputable contractors.

“Most engineering, electrical, plumbing, or general contractors here in Mississippi are honest, but disasters attract opportunists ready to prey upon the misfortunes of others,” said Robert Latham, director of MEMA. “Even though people are anxious to complete repairs, they need to be cautious before hiring contractors.”

Signs of a potential scam from one claiming to be a professional contractor:

  • Offers services door-to-door, is not listed in the telephone book and cannot provide a business license or proof of insurance.

  • Cannot provide references from completed jobs.

  • ffers a low price to provide work or services and asks for the entire amount to be paid before doing the job.

  • Promises to speed up the insurance or building permit process.

Tips for hiring a contractor:

Get a written estimate. Compare services and prices before making a final decision. Read the entire contract. Some contractors charge a fee for a written estimate, which is often applied to the price of the repairs they make.

Make sure the contractor is licensed to do business in Mississippi. Also, obtain a local building permit, if required. Sometimes a permit is necessary for demolition and for reconstruction. Check with your local government for requirements and confirm with the contractor who will be responsible to pay for the permits.

Ask for proof of insurance. Contractors should carry general liability insurance and workers’ compensation. If the contractor is not insured, the homeowner may be liable for accidents that occur on the property.

Call several former customers who had similar work done to make sure they were satisfied with the job. Reputable contractors will have no objections to providing names and contact information for satisfied customers.

Insist on a written contract. A complete contract will specify what will be done to complete the job, associated costs and the payment schedule. Never sign a blank contract or one with blank spaces.

Pay by check and write it to the contracting company rather than to an individual.

A reasonable down payment is 30 percent of the total project cost to be paid upon initial delivery of materials.

Make final payments when the work is completed. Do not make the final payment until the work is completed to your satisfaction. A reputable contractor will not threaten you or pressure you to sign if the job is not finished properly.

A contract may be cancelled. This should be done within three business days of signing. Follow the procedures for cancellation that are set out in the contract. Send the notification by registered mail with a return receipt to be signed by the contractor.

Report problems with a contractor or fraud to the Mississippi Office of the State Attorney.

For information on how to find contractors in Mississippi, visit the Disaster Contractors Network at http://ms.dcnonline.org.