HELPFUL DISASTER INFORMATION

Office of Emergency Service 501-730-9750
Contact this state agency if you have questions.

Arkansas Insurance Commission 501-371-2600
Contact this state agency if you have questions regarding procedures, requirements, or laws governing insurance companies.

Attorney General’s Consumer Protection Division 1-800-482-8982
This office can provide information about your rights as a consumer. State laws protect citizens from price-gouging following a disaster. Information is available about how Arkansans can protect themselves from crooks and con-artists.

CONSUMER TIPS FOR DISASTER VICTIMS

From the Office of Arkansas Attorney General
MIKE BEEBE

Price Gouging

Price gouging occurs when a business charges more for goods or services than its regular selling price. Unethical, unscrupulous businesses engage in price gouging during times of emergency, such as the recent tornadoes.

Act 376 of 1997 is a state law that was passed to prohibit businesses from price gouging in the wake of a disaster or state of emergency. The law is an amendment to the Arkansas Deceptive Trade Practices Act, which is enforced by the Attorney General and county prosecutors.

In short, the law prohibits businesses from charging more than 10% above the pre-disaster price of the goods or services. The scope of the new law is very broad and is intended to cover any item that may be needed in the event of a state of emergency. Examples of items and services covered by the law include: food, water, flashlights, batteries, blankets, nails, hammers, medicine, bandages, lumber and fuel.

The anti-price gouging law is triggered whenever the Governor or the President declares a state of emergency or whenever there has been a declaration of a red condition in the Homeland Security Advisory System. It remains in effect for at least 30 days and can be extended another 30 days by the local governing body if necessary to protect the lives, property or welfare of the citizens.

While the new law sets a general 10% cap on prices during an emergency, businesses may lawfully charge a higher price if they can successfully establish that the higher price is directly attributable to additional costs imposed by the supplier or to the result of additional costs for labor or materials used to provide the goods or service. In such a limited situation, the business may charge no more than 10% above the total cost to the business, plus the markup, which would customarily be applied by the business for that good or service in the usual course of business immediately prior to the onset of the state of emergency.

Act 376 allows strong penalties for those who engage in price gouging. A violation of Act 376 is a violation of the Deceptive Trade Practices Act, which can result in injunctive relief, restitution to consumers, costs, attorneys’ fees and civil penalties of up to $10,000 per violation. In addition, a violation of Act 376 is also a Class A misdemeanor, which carries a one-year jail term or $1,000 fine, or both.

Tips and Information

Before agreeing to purchase goods or services, try to do some comparison-shopping. Avoid “drive-by” quotes from door-to door solicitors. When possible, deal with established reputable businesses in the community. Always get estimates and price quotes in writing.

If you believe that a business may be engaging in price gouging, contact the Attorney General's Office at 200 Tower Building, 323 Center St., Little Rock, AR 72201. Or call (501) 682-2341 or 1-800-482-8982 (voice or TDD).

CONSUMER TIPS FOR DISASTER VICTIMS

About Home Repair
Even in emergency situations, it pays to be a smart consumer. Unscrupulous con artists prey on people who are victims of severe weather. By following some simple advice, you can avoid being cheated.

ABOUT HIRING PROFESSIONALS
• All electrical or plumbing work that deals with wiring or plumbing connections must be performed by state-licensed professionals.
• All work must be inspected by municipal building inspectors.
• Before hiring a plumber or electrician, check with the appropriate licensing boards to make sure the electrician or plumber is licensed.

When Contracting for Services:
• Beware of door-to-door solicitors selling home-repair work. To find someone reputable, ask friends and families who have recently used a home-repair contractor or professional.
• Obtain at least three written estimates. A reputable contractor or professional will never try to pressure you to obtain your business.
• Check with the Attorney General’s Office or the Better Business Bureau to find out if the company has a complaint history.
• Obtain and check at least three references from your contractor or professional.
• Obtain a written contract, with all details in writing, including any name brands of windows and other materials. The name and address of the contractor must be on the contract.
• Avoid paying for the entire job up front. One-third paid in advance, one-third paid halfway through the job, and one-third paid upon completion is the usual arrangement.
• Remember that contracts resulting from a home-solicitation sale generally must include a buyer’s right to cancel within three business days after the contract is signed.
• Make sure all warranties and guarantees are in writing.

WARNING SIGNALS of unscrupulous contractors or professionals:
• Asking for a large payment before work can begin.
• Asking for cash.
• Telling you that there is no need for a written contract – that a verbal agreement is enough.
• Attempting to pressure you to make a quick decision.
• Reluctant to provide references or examples of past work.

CONSUMER TIPS FOR DISASTER VICTIMS

ADVANCE FEE LOAN SCAMS

• Have the recent tornadoes or heavy rains damaged your home or business?
• Need a loan to rebuild it?
• Need the loan now?

Watch out - you're a perfect target for an "advance-fee loan scam."

"Advance-fee loan scam" is a long name for a simple scam. The con artists who operate these scams run ads - usually on TV - promising loans or credit cards. The con artists who operate advance-fee loan scams say they can help you out, no matter what your credit history or current financial situation. This fraud hurts twice - con artists target people whose difficult financial situations have made them vulnerable to the promise of quick money and then they take whatever money these people have left. Tornado victims in need of fast money are prime targets for this scam.

How the Scam Works

The sales pitch sounds great -but these phony lenders falsely promise easy-to-get loans. When you dial an 800 or 900 number, the loan "broker" on the other end asks a few questions, and then suddenly approves you for a loan. The catch is that you have to pay up-front fees ranging from one hundred to several thousand dollars to get the loan. You are told to expect your loan in a week or two.

Of course, you never get the loan. And you never see your money again, either. In fact, if you try to contact the company again in a week or two, you'll probably find that the company's phone has been disconnected.

Tips to Protect Yourself

* Be wary of loans that seem too easy to get. Remember, if it seems too good to be true, it probably is.

* Watch out for ads for loans that list a 900-number but don't say how much the call will cost.

* Be skeptical if you have to pay a significant amount of money before receiving a loan.

* Don't believe promises that your past credit history won't matter.

For More Information
If you need a loan, work with your local lender. If you need more information, contact the Attorney General's Office at 200 Tower Building, 323 Center St., Little Rock, AR 72201. Or call (501) 682-2341 or 1-800-482-8982 (voice or TDD).

CONSUMER TIPS FOR TORNADO VICTIMS

CHARITABLE GIVING
It's impossible to see the devastation caused by the recent tornadoes without wanting to help its victims. Many charities and non-profit organizations are springing into action, collecting food, water and money to assist those in need. Unfortunately, this is also a time for con artists to look for prey.

If you want to donate money to help victims of the tornadoes - and ensure that your money helps people truly in need - remember a few simple rules for smart giving.

Simple Rules for Smart Giving:

1. Give money to organizations you know. Don't fall for copycat names. If a charity is new to you - check it out.

2. Be leery of anyone who presses you for an immediate contribution. That may mean that they won't be around tomorrow. Reputable organizations will gladly answer all of your questions and accept your gift at a future date.

3. Ask where the money goes. Be suspicious if the charity refuses to answer questions about what percentage of contribution goes to the charity.

If a charity hires professional fund-raisers - that may take up most of your donation. Keep that in mind when deciding to donate over the phone.

4. Don't fall for heart-wrenching appeals that are combined with high-pressure tactics.

5. If you're going to contribute, contribute by check. Cash donations are impossible to trace.

6. Be wary of organizations with out-of-state addresses or only a post office box number as an address. Legitimate charitable organizations are required to register with the state.

7. Most of all, use your head as well as your heart when you decide to make a charitable contribution.

For More Information
For more information about a charity, or to make sure a charity has registered with the state, call the Attorney General's Consumer Protection Division at (501) 682-2341 or 1-800-482-8982.

WARNING! WATCH OUT WARNING! FOR HOME-REPAIR SCAMS
Fraudulent home-repair contractors may try to get their hands on your disaster-relief money. Phony contractors may promise to do repairs and then leave town after doing little or no work. Be careful - if a con-artist takes your money, it may be impossible to get it back.

PROTECT YOURSELF from a second disaster:
Follow the tips below and call the Attorney General’s Consumer Protection Division if you suspect a scam: (501) 682-2341 or 1-800-482-8982; or TDD: (501) 682-6073

SURE SIGNS OF A HOME-REPAIR SCAM
• Strangers arriving at your door, often in an unmarked truck or van, offering to do repairs.
• Door-to-door salespeople claiming, “We’ve just finished a job nearby and have material left over, so we can do the job for half the price.”
• The contractor gives you a post office box address, with no street address, or a telephone number that is just an answering service.
• Refusal to give a written estimate, contract, or references.
• High-pressure sales tactics or contractors who want to rush your decision.
• Requirements of a large down payment. • Check out a home-repair firm before signing a contract. Look at some of the company’s work and check references.
• Once you’ve chosen a contractor, make certain any verbal promises are written into the contract.
• Specify materials, completion dates, and never make the final payment until the work is completed in accordance with the contract.

Many legitimate Arkansas businesses and individuals have provided assistance and support to the victims of natural disasters. Unfortunately, consumers should be aware of those who will not act as honorably.

• Fight fraud: Fraudulent home-repair contractors may target victims as they begin recovering from the tornadoes. Phony contractors may promise to do repairs and then leave town after doing little or no work. Other scammers may even pose as government inspectors to take your money.
• Protect your disaster recovery funds: The tips below will help protect against victimization by con artists. Call your local police or the Attorney General’s Consumer Protection Hotline if you suspect a scam.

CONSUMER PROTECTION HOTLINE 1-800-482-8982; TDD (501) 682-6073

TIPS: IF YOU SUSPECT FRAUD, CONTACT LAW ENFORCEMENT OFFICIALS IMMEDIATELY

• Check with local officials to see if no-cost or low-cost home inspections are available to help you decide on repairs.
• Don’t get pushed into making a decision today: Some sellers use high-pressure or scare tactics to get you to sign a contract.
• Cancel the contract: If a non-emergency sale over $25 is made in your home, state law allows you to cancel it within three business days.
• Check workers’ and officials’ credentials: Never let anyone into your home without first asking for an ID.
• Use reliable, bonded contractors: Check for complaints with the Consumer Protection Hotline, Better Business Bureau or local trade associations.
• Always get a second or third opinion: Get a written estimate and don’t overlook the fine print. Include a statement of who is responsible for equipment and materials. If you make a partial advance payment for materials, make the check out to the materials supplier or to the supplier and contractor.
• Get a contract: Sign only a complete contract that lists job details and costs. Make sure the agreement states who will apply for permits or licenses. Get a completion date before paying. Make a final payment only when you’re satisfied and you have lien waivers from each supplier to ensure that no supplier has placed a lien on your property.
• Get proof of insurance: Make sure a contractor carries general liability insurance and workers’ compensation. If the contractor is uninsured, you may be liable if an accident occurs or a structure is damaged.
• Shop around: Some businesses advertise sales offering appliances and major electronics at reduced prices. These prices could be great bargains or they counld just be gimmicks.