FTC, DOJ and CFPB Warn Consumers About Potential Scams and Price Gouging in the Wake of Hurricanes and other Natural Disasters

As the nation braces for another major hurricane, the Federal Trade Commission along with the Department of Justice and the Consumer Financial Protection Bureau are warning consumers about those looking to take advantage of natural disasters by engaging in potential fraud or price gouging.

Scammers quickly exploit weather emergencies and take advantage of people trying to recover or donate to disaster victims. Consumers who may have encountered a scam can report it to the FTC at ReportFraud.ftc.gov.

“As Americans seek safety from natural disasters, we’re hearing troubling reports of price gouging for essentials that are necessary for people to get out of harm’s way—from hotels to groceries to gas,” said FTC Chair Lina M. Khan. “No American should have to worry about being ripped off when fleeing a hurricane. In partnership with state enforcers, the FTC will keep fighting to ensure that Americans can get the relief they need without being predicted by bad actors exploiting a crisis.”

“Companies are on notice: do not use the hurricane as an excuse to exploit people through illegal behavior,” said Deputy Assistant Attorney General Manish Kumar of the Justice Department’s Antitrust Division. “The Antitrust Division and its law enforcement partners will act quickly to root out anticompetitive behavior and use every tool available to hold wrongdoers accountable.”

“Price gouging during a natural disaster is just plain wrong, and excessive price increases can be unfair under the law,” said CFPB Director Rohit Chopra. “The CFPB will be on the lookout for financial companies that take advantage of natural disasters to rip people off.”

Possible types of natural disaster scams include:

• Fraudulent charities soliciting donations for disaster victims that often imitate the names of charities linked to the disaster.
• Scammers impersonating government officials, offering disaster relief in exchange for personal information or money.
• Scammers promoting non-existing businesses or investment opportunities related to disaster recovery, such as rebuilding or flood-proofing.
• Price gouging for essential goods and services needed by disaster victims.

To avoid scams and frauds while you’re recovering from a hurricane or another natural disaster, remember only scammers will insist you pay for services by wire transfer, gift card, payment app, cryptocurrency or in cash. Avoid anyone who promises they can help you qualify for relief from the Federal Emergency Management Agency (FEMA) ― for a fee. That’s a scam. FEMA will never require you to pay a fee to get disaster relief. Never sign your insurance check over to someone else. Be sure to research contractors and get estimates from more than one before signing a contract for work. Get a written contract for repairs and read it carefully before signing it.

The FTC has additional information for consumers about how to avoid scams as well as how to prepare for and respond to natural disasters. The CFPB’s disaster and emergencies toolkit provides guidance on handling your finances if you are preparing for, recovering from, or rebuilding after a hurricane, tornado, wildfire, or other emergency. Consumers can submit a complaint about a financial product or service at consumerfinance.gov/complaint.