Tips to Avoid Fraud in Aftermath of Disaster

AUSTIN, May 28, 2015 - Texas Attorney General Ken Paxton warned Texans of the risk of fraud and common scams in the wake of severe weather, tornadoes and flooding that began on May 4, 2015, and has continued at least through Memorial Day weekend, impacting communities across the state.

“The loss of lives as a result of these deadly storms is a tragedy for our state, and our thoughts and prayers are with the victims and their families,” Attorney General Paxton said. “The extreme flooding and dire storms have devastated communities across the entire region, destroying homes and property in its path and posing a severe safety threat to countless Texans. Disasters such as these can unite communities and, as we are seeing, bring out the best in people. However, everyone should be aware of bad actors looking to take advantage of the circumstances. My office will continue working to protect Texans from deceptive acts, and will carefully monitor the situation as Texans rebuild and recover.”

Attorney General Paxton advises Texans to consider the following tips when in need of businesses or contractors to help in the clean-up and rebuilding process:

  • Only do business with licensed or bonded contractors or builders;
  • Consult the Better Business Bureau to ensure you are working with a trustworthy business. link
    Contact an insurance adjuster to get an estimate of the damage and repair cost;
  • Be wary of contractors who solicit services door-to-door, especially those that are unfamiliar or from out of town;
  • Know that under Texas law, the door-to-door seller must advise you orally and in writing that you have a right to cancel the sale within three days. Click here for more information. link
    Get the salesperson’s license plate number;
  • Don’t rush into signing a contract, and never pay up-front for promised work;
    Secure the terms of any warranty work in writing; and

  • Ask for references, or rely on recommendations from friends or relatives who have had experience with honest contractors.
  • Although Texas’ price gouging law prohibits vendors from illegally raising prices to reap exorbitant profits during a disaster, it does allow retailers to pass along wholesale price increases to customers. Thus, in some cases, increased prices may not necessarily signal illegal price gouging.

Gov. Greg Abbott has declared a state of disaster in 45 counties, including: Archer, Bastrop, Blanco, Bosque, Bowie, Caldwell, Cass, Clay, Collin, Comal, Cooke, Denton, Dewitt, Eastland, Fannin, Gaines, Garza, Grayson, Grimes, Harris, Harrison, Hays, Henderson, Hidalgo, Hill, Hood, Houston, Jasper, Johnson, Kendall, Montague, Navarro, Newton, Nueces, Parker, Red River, San Jacinto, Smith, Van Zandt, Walker, Wichita, Williamson, Wilson, Wise and Zavala.

Under state law, once the governor issues a declaration, vendors are prohibited from charging exorbitant prices for necessities such as drinking water, food, batteries, generators, towing, clothing, medical supplies, lodging, repair work and fuel during and after the crisis. Currently, the disaster declaration prompted by the widespread damage from the heavy rainfall, flooding and tornadoes is effective only in the named counties. Price gouging is illegal, and a disaster declaration triggers stiffer penalties under the Texas Deceptive Trade Practices Act.

Texans in affected counties who believe they have encountered price gouging should call the Office of the Attorney General’s toll-free complaint line at (800) 621-0508 or file a complaint online at www.texasattorneygeneral.gov.

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