Consumers are urged to contact the Consumer Assistance Program at 1-800-649-
2424 if someone calls with what the consumer feels is a scam - an early alert can prevent others from fraud. Consumers are also urged to contact the local newspaper’s consumer desk to notify them of scams.
Price Gouging Section 2453 of Title 9, Chapter 63 of the Vermont Statutes Annotated entitled
“Consumer Fraud” makes it unlawful to engage in “unfair methods of competition in commerce” or to use “unfair or deceptive acts or practices in commerce.” Consumers are urged to contact the Vermont Attorney General’s Consumer Assistance Program at 800- 649-2424 or 802-656-3183. This statute can be enforced by the Attorney General, by local District Attorneys, or by an action brought privately by a citizen.
Financing Scams After a disaster, a homeowner frequently needs major repairs for serious damage.
This may include roofing and siding, plumbing, electrical wiring, heating and cooling, replacement of damaged structures, interior living quarters, etc. The cost of these repairs is most likely greater than the insurance coverage and the ability of the homeowner to cover the cost. FEMA will provide some funds for homeowners to repair, replace, or rebuild housing, but the cost is likely to be greater than what FEMA is willing to pay. FEMA grants are not designed to restore property to its pre-disaster condition – they are only meant to make a property habitable. Unscrupulous contractors or salespeople may take advantage of homeowners’ desperation, promising to make the repairs at unrealistic prices or using financing schemes that are extremely disadvantageous for the homeowner.
Before looking to financing options, the homeowner should appeal awards issued
by FEMA and insurance to obtain more (free) funds. The next best option for many homeowners will be a low-interest loan from the Small Business Administration (SBA) in order to complete repairs or a refinance of the homeowner’s mortgage through the SBA.
Financing scams come in a number of forms. In the case of most scams, the
salesperson or contractor induces the homeowner to sign a contract secured by the home. The loan repayment amounts are higher than what the consumer can afford to pay on a fixed income, and the contractor is then able to foreclose on the property. Alternatively, the contractor provides inadequate repairs or services and the consumer refuses to pay what is due on his promissory note, again leading to the possibility of foreclosure.
Because of the increased costs of confronting an emergency, consumers who have
survived a disaster may fall prey to refinancing schemes in the hopes of keeping up with their credit card payments and mortgage payments. Finance companies may promise to consolidate the homeowner’s debt for existing mortgage, credit card debt, car loans and repair loans. But these refinancing schemes often include high processing fees, payments
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