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Beware of charity scams in wake of Superstorm Sandy

Larry Downing / Reuters

President Barack Obama meets with workers at the National Red Cross headquarters in Washington this week. The Red Cross is one of the nation's leading disaster-relief organizations.

Watch out: Scammers trying to cash in on Superstorm Sandy are on their way. The destruction caused by the storm gives the bad guys a major opportunity to steal your money or personal information.

Symantec, the security software firm, reports the first wave of Sandy-related spam has been sent. The messages have subject lines such as: “Help Sandy Victims and get $1000 for Best Buy!,” and “Deposit Processing Open Today (Frankenstorm doesn’t stop us).”

These phishing expeditions are designed to snag your credit card, debit card or bank account numbers.

Based on previous disasters, Symantec predicts a rash of cyber-attacks that start with links to fake news stories, photos and videos. These will be distributed via Facebook posts and tweets, Internet searchers, text messages and email.

Resist the urge to click on these unknown links or you could download some nasty malware onto your computer or smart phone.

Charity scams 
This is an emotional time for people all across the country. You want to help, and con artists hope to take advantage of that. They make phone calls and pretend to be a bona fide charitable organization. They set up websites that look like reputable charities. It’s very easy to do.

The online security firm Avast! reminds us that back in 2005, after hurricanes Katrina and Rita hit the Gulf Coast, there were at least 15 bogus websites designed to look like the American Red Cross site. Donors who took the bait gave their personal information, such as credit card numbers and PayPal passwords, to the online crooks.

“Charity scams are among the most despicable scams out there,” said John Breyault, director of fraud.org, the National Consumers League’s Fraud Center. “Not only are consumers victimized when they give money to the scammers, but the people who need help to rebuild their lives don’t get that money.”

Related: 7 tips to avoid post-disaster insurance and repair scams

Ohio Attorney General Mike DeWine has warned residents of his state to be cautious if they receive calls to make a donation to the storm relief effort.

“Unfortunately, there are some who might use our generous nature to take the donations for themselves, not for those in need,” he said. 

A charitable request might be a scam, DeWine advises, when the caller:

  • uses high pressure tactics to solicit an immediate donation.
  • is hesitant or unable to answer questions.
  • asks for the check to be made payable to a person instead of a charity.
  • offers to pick up your check immediately, rather than waiting for you to mail it off.
  • promises a prize in exchange for a donation.

Bennett Weiner, chief operating officer of the BBB Wise Giving Alliance, urges donors to take their time and do their homework before responding to any solicitation.

“You want to know what they do, what relief activities your contribution is going to fund,” he said. “You can’t assume based on the name alone what activities your generosity is going to support.”

To help the victims of Hurricane Sandy, Weiner suggests choosing an organization with some skill and experience in disaster relief activities, such as the American Red Cross.

“A start-up organization, or even an established charity that decides to get involved in relief work for the first time, may have great intentions, but may not necessarily carry it out very effectively,” he cautioned.

Protect yourself: Never make a donation by clicking on a link in an email or text. Go to the site on your own. Be careful with web searches – names can be misleading – you could wind up on the wrong site.

Don’t allow yourself to be pressured into making a donation.

Don’t give your credit card information to an unknown caller. If you’re interested in the cause, ask to be sent information.

Stop, think and check them out. You can do that at sites such as: BBB Wise Giving Alliance and Charity Navigator.

Home repair scams
“After a spectacular storm like this, fraudsters will come out of the woodwork offering to repair damaged homes,” warned Susan Grant, director of consumer protection at the Consumer Federation of America. “They may take your money and just disappear. Or they may start the work and not finish it. Or they work may just be really shoddy quality.”

If you need repair work done and don’t have a trusted contractor, you want to find someone qualified to do the job. And in a situation like this, it won’t be easy. Try to stay calm, so you can deal with the situation rationally.

For major repairs, the Better Business Bureau recommends getting at least 3 to 4 estimates. They should be based on the same specs and materials.

Get everything in writing. The contract needs to spell out when the job starts and will be completed, a payment schedule, what materials will be used and what sort of clean-up will be done.

With property damage estimates topping out at $20 billion and homeowners desperate to get started recovering, there will be plenty of scammers coming out of the woodwork. CNBC's Sharon Epperson and Jeanne Salvatore of the Insurance Information Institute discuss how you can avoid getting ripped off.

Remember: Never make a final payment until all the work is completed to your satisfaction.

Consumer Reports suggests:

  • Try to deal with people who live and work in your community.
  • Ask for copies of the contractor’s general liability and worker’s compensation insurance.
  • Avoid paying more than the minimum in advance.

Protect yourself: Steer clear of anyone who shows up at your home or office, offers an instant estimate and wants a sizeable payment in cash before any work is done.

Say no to a contractor who promises a great price because he has left-over materials from a previous job. That’s a common trick used by fly-by-night operators.

Don’t let anyone pressure you into hiring them. You need time to check references, to see if they are licensed or registered (if required in your state) and to check them out with the Better Business Bureau.

Helpful resources

Herb Weisbaum is The ConsumerMan. Follow him on Facebook or visit The ConsumerMan website.