It’s been a busy year for natural disasters, with Hurricane Ian only the latest calamity to befall the United States and its territories. If your nonprofit operates in or serves clients in a disaster zone, you know how difficult the recovery process can be. Unfortunately, fraud perpetrators attempting to profit off the misery of others can make rebuilding difficult — even for charities.
6 steps to foiling construction scams
Construction fraud is a particularly common scheme in the wake of a destructive storm or fire. Your nonprofit might be so focused on reopening and assisting disaster victims that it doesn’t vet contractors as carefully as it would in better times. That’s what fraudsters are counting on. Instead:- Work with your insurance company to make sure any repairs to your facilities are covered. Your insurer probably will send an adjuster to evaluate the damage, giving you an estimate of what repair costs should be.
- Take time to obtain several bids. Review them carefully, bearing in mind that “special hurricane offers” may be nothing more than come-ons. Be sure the bids specify exactly what work is included, all costs and a time frame for completion.
- Beware of anyone who looks or acts unprofessional or offers to save you money by using leftover materials. You may be agreeing to shoddy components or unsafe workmanship.
- Ask for a state contractor license number and proof of insurance.
- Get a signed contract before work begins and don’t sign it until all blanks have been filled.
- Don’t pay in full until work is completely finished. And don’t pay more than the amount in the contract — even if the contractor claims material costs went up unexpectedly. Before you make your final payment, ask the contractor to sign a Release of Lien form.
