NICB Warns California Residents About Fraudulent Contractors Following Catastrophic Wildfires

Warning Signs for Residents Directly and Indirected Impacted

OAK BROOK, Ill., Jan. 15, 2025 /PRNewswire/ -- Following the devastating wildfires in Southern California, the National Insurance Crime Bureau (NICB), the nation's leading non-profit association dedicated to preventing insurance fraud and crime, urges residents and business owners to know the signs of fraudulent contractors and to take the necessary precautions to protect themselves, their property, and their loved ones.

"Wildfires pose a serious threat to the livelihoods of hardworking families and business owners," said David J. Glawe, President and CEO of the National Insurance Crime Bureau. "After these catastrophic events, fraudulent contractors pour into hard-hit communities to take advantage of residents who have already lost everything. Residents need to be vigilant and know the signs of a fraudster, so they can avoid being victimized a second time."

NICB agents have been deployed to the region to work with local, state, and federal law enforcement agencies, as well as insurance companies, to help prevent fraud from occurring and to utilize NICB data and intelligence resources to investigate all reported cases of fraud. Additionally, NICB is working with state and federal government agencies and insurance industry trade associations on anti-fraud efforts.

Given the widespread devastation, NICB anticipates a variety of fraud schemes to occur involving companies or individuals promoting debris and tree removal, home construction, smoke and ash clean-up, and medical services. Fly-by-night haulers can also be a source of fraud and crime as they take short cuts and illegally dispose of debris in the desert or on public lands rather than appropriately dumping it in state-approved landfills. Homeowners and taxpayers are often left footing the bill for these illegal activities.

While most contractors run honest, ethical businesses essential to the recovery process, fraudulent contractors target unsuspecting victims with high-pressure sales tactics in person, by phone, and through the internet. They often go door-to-door, pressure residents to sign contracts on the spot – often with multiple blank spaces in them – demand payment upfront and even require you to sign an Assignment of Benefits agreement which transfers your insurance rights to them. 

To avoid being victimized a second time, NICB encourages residents, business owners, and community leaders to take the following steps to protect themselves.

1.      Contact your insurance company immediately about damaged property.

• Ensure that you understand all documents related to your claim and consult your insurance carrier before making any decisions.

2.      Obtain multiple bids and verify contractors. After a disaster, individuals may encounter contractors offering immediate cleanup and repair services. While many are reputable, some may be fraudulent.

• Obtain multiple estimates to compare prices and services.
• Request references and conduct background checks on the contractor.
• Verify the contractor's identity by asking for their driver's license and recording their license number and vehicle plate.
• Be cautious of out-of-state licenses and vehicle registrations, which may indicate potential fraud.
• Do your own research and inquiries through your state licensing agencies and the Better Business Bureau.
  
  

3.      Scrutinize all offers and contracts.

• Avoid contractors who pressure you into immediate decisions or signing contracts on the spot.
• Get all agreements in writing, including costs, work to be done, timelines, and payment schedules.
• Do not sign contracts with blank spaces; these can be filled later with terms you did not agree to.
• Be cautious of signing an Assignment of Benefits agreement, which could transfer your insurance rights to a contractor.
• Never pay the full amount upfront or sign a completion certificate until you are satisfied that the work is finished.
  
  

4.      Report suspicious activity immediately.

• If something seems off or you suspect fraud, report it to law enforcement and your insurance company immediately.
• Avoid sharing personal information over the phone, especially with callers claiming to represent a national company. 

Residents and business owners can find more resources and information on avoiding fraud after a disaster by visiting NICB.org. They are also urged to report any suspicious or fraudulent activity to local law enforcement and the NICB's hotline at 1-800-TEL-NICB.

NICB spokespeople are available for interviews upon request by visiting Media Requests.

About the National Insurance Crime Bureau: Headquartered in Oak Brook, Ill., the National Insurance Crime Bureau (NICB) is the nation's leading not-for-profit organization exclusively dedicated to combatting and preventing insurance crime through Intelligence, Analytics, and Operations; Education and Crime Prevention; and Strategy, Policy, and Advocacy. NICB is supported by more than 1,200 property and casualty insurance companies and self-insured organizations. To learn more, visit NICB.org.

SOURCE National Insurance Crime Bureau