When disaster strikes, so do the fraudsters


As Hurricane Harvey devastates the Texas coast and the U.S. megacity of Houston, investigators will be on high alert for another type of threat: fraud.

Disaster fraud is nothing new. Law enforcement, prosecutors and other legal authorities in eight different countries are still dealing with cases from 2012’s Hurricane Sandy, which devastated the Caribbean and eventually wreaked havoc upon the U.S. eastern seaboard. In New Jersey, new indictments reported just last month indicate how long these investigations can take, and how lengthy the process can be.

And that’s just for those who get caught.

According NJ.com in New Jersey, five more individuals face charges for filing fraudulent applications for relief funding, bringing the tally there to 100. As the article reports:

The latest group filed claims for homes they said were primary residences when they were not, the state Attorney General's Office said.

Most state and federal relief programs are only available to those whose primary residences were damaged by the storm.

But there are other risks as well. Relief organizations have been charged with misappropriating funding meant as direct aid for disaster victims. Materials and supplies earmarked for disaster areas are sometimes horded, sold or otherwise used contrary to their purpose. And sham “charities” can pop up overnight, soliciting cash donations under the pretense of relief, while that money actually lines someone’s pockets.

Now, as another disaster unfolds, CRI Group offers some guidelines for individuals, corporations and non-profit organizations to follow as they seek to provide aid.

Research the charity. Disasters unfold quickly, but some quick checking online can help establish whether a charity or non-profit aid group is legit. Make sure it is tax exempt and rated by an external evaluation site, like GiveWell or Charity Navigator.

Look out for “new” charities. If a charity or non-profit aid group has no history, very little trail on the Internet, no registration with the government nor any testimonials online, it might be fake or fraudulent. It’s better to give your donation to an established, charitable organization.

Be suspicious of solicitations. Social media posts, mass or spam emails, all requesting quick cash donations could be red flags of fraud. Look for inaccurate or incomplete information about the disaster, the location, and the charity itself. Double check the credibility of the charity and don’t donate through an email link – instead, visit the organization’s website directly. After doing so, if you’re comfortable that it is a legitimate group, consider making your donation.

When disaster strikes, people need help. The generosity of others can mean the difference between life and death for those who are suffering. But we must always be cognizant of the fact that fraudsters are opportunists. Any situation that creates urgency and chaos is a scenario they will seek to exploit.

As with all other business matters, conducting due diligence investigation will help cut down on disaster fraud – and provide you with the peace of mind that your contribution is going where it can do the most good.