As another major hurricane approaches, the Justice Department, in collaboration with the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB), has issued a warning to consumers about potential fraud, price gouging, and collusive schemes during natural disasters.
Scammers often exploit these emergencies, taking advantage of people trying to recover or donate. The disruptions caused by such events can also lead to opportunities for illegal activities that inflate prices for stressed customers.
"Companies are on notice: do not use the hurricane as an excuse to exploit people through illegal behavior," stated Deputy Assistant Attorney General Manish Kumar of the Justice Department’s Antitrust Division. He emphasized that authorities will act swiftly against anticompetitive practices.
U.S. Attorney Ronald C. Gathe Jr., Executive Director of the National Center for Disaster Fraud (NCDF), remarked, "Wrongdoers are looking to exploit opportunities and victims of natural disasters for their own personal gain." He assured that the Justice Department is prepared to combat fraudulent activities and support disaster victims alongside various partners.
FTC Chair Lina M. Khan highlighted concerns over inflated prices for essentials needed during evacuations. She stated, "No American should have to worry about paying grossly inflated prices when fleeing a hurricane."
CFPB Director Rohit Chopra added, "Price gouging during a natural disaster is just plain wrong," indicating that such actions could be deemed unfair under law.
Potential scams include fraudulent charities imitating legitimate ones, scammers impersonating officials offering relief in exchange for money or information, non-existent businesses related to recovery efforts, price gouging on essential goods and services, and businesses using supply chain issues as cover for overcharging.
To avoid scams post-disaster, it is advised not to pay for services via wire transfer or other insecure methods. Verify contractors thoroughly before signing contracts and ensure any agreements are documented in writing.
The NCDF was established after Hurricane Katrina to deter fraud in disaster aftermaths. It includes over 50 agencies reminding the public to report suspected fraudulent activities related to relief operations at www.justice.gov/DisasterComplaintForm or via hotline at (866) 720-5721.
Concerns about anticompetitive conduct can be reported to the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or online at www.justice.gov/atr/report-violations.
