How to Avoid Hurricane Sandy Scams

December 12, 2012 | By: TaxCure Staff

sandy-tax-scamHurricane Sandy was devastating enough that many people are still trying to help. Many families lost everything, and face a holiday season without much to be cheerful about. You can help others during this time, and contribute to the relief effort. You’ll be brightening someone else’s day – and feeling better about yourself.

Unfortunately, there are those who take advantage of these types of situations, scamming others. While you probably want to help, you also want to be reasonably sure that your money is going to the right place. Here are some of the potential Hurricane Sandy scams to avoid:

  • Crowdfunding: Raising money in large groups, through a specific project, is one way to meet a need. Unfortunately, you have to be careful. Thanks to sites like Kickstarter and Indiegogo, many people are tapping into the power of crowds to raise money. But you have to be careful; not everyone using these types of sites will actually give money to the victims of the hurricane.
  • Investment scams: Watch out for investment scams that claim that you have the chance to get in on a hot stock that will skyrocket in the aftermath of a natural disaster. You’ll be told you’re getting a “hot tip” or that you have the chance to get in on the ground floor with a company that is helping with rebuilding, or re-supplying, or cleaning up. Make sure you vet such “opportunities;” many of them are too good to be true.
  • Cold calls and emails: You might also receive cold calls and emails asking for donations. You give your credit card information, and now the scammer has sensitive information. Fraudulent purchases may show up on your credit card, or the scammer can sell your information on the black market. Be wary of giving your personal financial information to anyone who approaches you, cold, via email, phone, or social media
  • Fake charities: Sometimes, you might come across a charity that seems – on the surface – to be ready to help the victims of Hurricane Sandy. You have to watch out for those since fake charities crop up all the time following a disaster. Rather than donating to these types of charities, consider contributing resources to the charities that you know and trust. Research before you donate and take the initiate the transaction with a charity you trust. Make sure you pay with a check, and that they are a 501c3 organization if you intend to get a tax deduction.

There are plenty of ways to help others who have been impacted by disasters like Hurricane Sandy. Take a step back, though, and make sure you know that the money is going where it should. Additionally, don’t let the desire for a little more money cloud your judgment and put you in a situation where you fall for an investment scam. If you need help with tax relief or a disaster, reach out to the Internal Revenue Service at 1-866-562-5227.

Watch Out for Flood Damaged Cars

Another scam you need to watch out for related to Hurricane Sandy is the possibility that you could buy a flood-damaged car. Unfortunately, some of the less scrupulous will try to sell cars that have been damaged. Salvage operators may try to cosmetically spruce up cars that have been designated total losses, and then sell them as used cars.

Sadly, this is a process made easier by the fact that many people buy cars online now. You could agree to buy the car, send the money, and then realize that the vehicle has sustained significant damage and you are out of luck.

Before you buy any used car, make sure that you thoroughly go over it, checking for signs that it might have been flooded. Be aware of musty smells, rust on screws that normally wouldn’t be exposed to water, and corrosion in the car’s electric wiring. Be careful about the cars you buy so that you don’t end up with a damaged car.

Be on your toes when it comes to Hurricane Sandy. Be aware of the risks, and do what you can to avoid them.