Disaster Recovery Contractor Scam

Overview

After a hurricane, wildfire, tornado, or other disaster, unlicensed contractors show up in the recovery zone promising fast repairs, demand full payment up front through hard-to-trace methods, and either vanish or leave the work unfinished.

How It Works

In the days after a hurricane, wildfire, tornado, or other disaster, unlicensed contractors and scammers appear in the recovery zone offering immediate clean-up or repairs. They tell homeowners they don't need to be licensed to do the work, offer a discount if the homeowner signs a contract right away, and sometimes ask the homeowner to sign over their insurance check directly to them. They ask for full payment up front, insisting on wire transfer, gift card, payment app, cryptocurrency, or cash rather than a credit card or check, and may ask the homeowner to sign a "blank contract" or suggest borrowing from a lender the contractor knows. A related version of the scam involves someone offering to help a disaster victim qualify for FEMA relief funds for a fee — FEMA does not charge application fees, so any such offer is a scam. After collecting payment, the scammer may do substandard work, disappear before finishing, or never start at all.

Red Flags

• The contractor claims they don't need to be licensed to do the work
• You're offered a discount only if you sign a contract immediately
• You're asked to sign your insurance check over to the contractor
• Full payment is demanded up front, before any work begins
• The contractor insists on wire transfer, gift card, payment app, cryptocurrency, or cash instead of a credit card or check
• You're asked to sign a blank contract
• Someone offers to help you qualify for FEMA relief funds for a fee

Real Examples

• The FTC's own consumer guidance on disaster recovery scams lists signing over an insurance check and signing a "blank contract" as specific tactics scammers use on homeowners rebuilding after a storm
• The same FTC guidance states directly that FEMA doesn't charge application fees, and that anyone asking for money to help a disaster victim qualify for FEMA funds is running a scam

Where It Spreads

How to Protect Yourself

• Check out a contractor's reputation on trusted review sites and by searching their name online with words like "scam," "review," or "complaint" before you commit
• Confirm the contractor's license and insurance with your state or county government, and ask for proof of insurance directly
• Get written estimates from more than one contractor, each listing the work, materials, completion date, price, and the contractor's contact information
• Get everything in a written contract, and never sign a blank one
• Pay by credit card or check only — never by wire transfer, gift card, payment app, cryptocurrency, or cash
• Never sign your insurance check over to a contractor; arrange with your bank or credit union for a certificate of completion so the contractor is paid in stages as you approve the work
• Remember FEMA never charges an application fee — anyone who wants money to help you qualify for FEMA relief is running a scam

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