Construction Fraud During Disasters

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As your District Attorney, I’m committed to increasing communication and accessibility between the DA’s Office and you, the community. One way I hope to do that is through this new monthly column, where I’ll be providing information and tips on how you can stay safe. I’ll also keep you updated on current trends and topics in the criminal justice system.

As your District Attorney, I’m committed to increasing communication and accessibility between the DA’s Office and you, the community. One way I hope to do that is through this new monthly column, where I’ll be providing information and tips on how you can stay safe. I’ll also keep you updated on current trends and topics in the criminal justice system.

We can all agree that watching the deadly wildfires in Northern and Southern California ravage homes, lives and businesses has been heartbreaking. Seeing this level of destruction leaves us with a pit in our stomach. 

Natural disasters are already devastating. So when scammers show up at our doors pretending to care about damage to our home or property – ready to spike prices in a time of need, it’s truly the definition of adding insult to injury. 

During a declared state of emergency, it is illegal for a business to increase its prices for essential goods or services by more than 10 percent, unless they can show their own costs have been increased. Here is what this rule applies to: 

Food

Goods or services used for emergency cleanup

Medical supplies

Home heating oil

Building materials

Housing

Transportation 

Gasoline 

In addition, it is a misdemeanor for a hotel or motel to increase regular rates by more than 10 percent during a declared emergency.

During the San Diego County wildfires of 2003, 2007 and 2014, investigators from the District Attorney’s Office, the California Department of Insurance, the Contractors State License Board, and the Department of Motor Vehicles fanned out over fire-ravaged areas to warn homeowners to beware of would-be criminals who prey on victims of natural disasters. They posted signs warning unlicensed contractors that operating in a declared state of emergency area is a felony.

Anyone should be extremely cautious if approached by aggressive agents, adjusters or contractors after a disaster. Most businesses are honest and have good intentions, but unfortunately there are always bad actors waiting to take advantage of disaster victims. 

You should know that working as an unlicensed contractor during a state of emergency is a felony.  Keep these tips in mind when selecting a contractor:

Ask for proof of licensing such as a pocket license and a second photo ID.

Always verify that the license number matches the contractor you are dealing with. 

Beware of scare tactics, odd calls or unsolicited contacts. 

Make sure the contractor carries workers’ compensation and liability insurance.

In the aftermath of natural disasters, debris-clearing scams often surface. Do not provide payment upfront and be sure to ask where the debris is being taken.  Scammers often ask for money up-front and then disappear.  Sometimes they dump debris on a neighbor’s property or park, which may cause you to be responsible for the costs and penalties.

Report suspected fraud to:

San Diego District Attorney’s Office 

Insurance Fraud Hotline

330 West Broadway, Suite 700

San Diego, CA 92101

1-800-315-7672

California Department of Insurance

10021 Willow Creek Road, #100

San Diego, CA 92131

Helpline 1-800-927-HELP (4357)

Contractors State License Board

9246 Lightwave Avenue, Suite 130

San Diego, CA 92123

www.clsb.ca.gov

1-800-321-2752

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