Post-disaster scams expected to target wildfire survivors seeking to rebuild

As Maui residents look ahead to rebuilding after the devastation of the August wildfires, there’s another danger awaiting them — fraudulent construction contractors.

“Disasters unfortunately attract crooked contractors,” said retired San Diego Deputy District Attorney Paul Greenwood, who was on Maui Friday for an AARP Hawaiʻi Fight Fraud Together seminar at the Kaunoa Senior Center in Spreckelsville. “They are looking for vulnerable homeowners.”

Greenwood successfully prosecuted fraudulent contractors after fires in 2007 destroyed 1,738 homes and burned more than 368,000 acres in San Diego County.

“Rogue contractors will look for the next major disaster, whether it be a hurricane or a tornado, or fire or flooding. They will appear, and they will go around looking for new victims,” he said.

“Maui residents looking to rebuild should be especially alert for contractor fraud,” said Kealiʻi Lopez, AARP Hawaiʻi state director. “But building and remodeling scams can happen to any of us anywhere in the state, and we all need to know what to do and what are the warning signs.”

Greenwood, an AARP Fraud Watch Network consultant, said fraudulent contractors try to convince homeowners that they can give them a discount and can complete the job quickly. “They try to persuade the homeowner that by trusting them, they will save money and bypass red tape.”

One of the biggest warning signs is high-pressure sales tactics, he said. “Don’t be bullied into signing a contract. If they tell you the offer is only valid for 48 hours, that’s ridiculous.”

Other tips for fighting contractor scams:

• Get three quotes.
• Check out contractors with the Better Business Bureau.
• Check their contractor’s license with the Contractor’s License Board.
• Get a copy of their license.
• Get the license plate of any vehicles on the job.
• Never pay by cash; always pay by check or credit card.
• Photograph every step of the construction.
• Don’t pay more than you need to for each step of the work.

“They (fraudulent contractors) will try any which method to persuade you that they are the right guy including senior discounts and fake home tests that claim to show leaks or termite activity,” Greenwood said. “I prosecuted a guy who put flyers on the windshields of cars in church parking lots hoping to gain parishioner’s trust.”

Scammers employ a variety of cons and are very sophisticated, brazen and professional, he said. They are clever at tailoring pitches specifically to any weakness they might find in a victim, frequently through personal information gleaned from social media.

“Often they are, in fact, organized crime rings, and they are now using and emphasizing cryptocurrency as the medium by which we’re going to provide the money,” he said.

Greenwood said he’s concerned that cryptocurrency ATM machines are cropping up in Hawaiʻi and on the Mainland. “They are becoming much more popular in gas stations, liquor stores, supermarkets, and, unfortunately, once we use a cryptocurrency ATM machine, it is very difficult to follow the money and trace it.”

Con artists know that the key to separating people from their money is gaining their trust and preying on human weaknesses such as fear, loneliness and greed, he said.

“They often use a sense of urgency, of danger, of panic because they rely upon our human nature that if we feel somebody is in danger; or we need to act quickly; then we will not be thinking logically,” he said. “And that is often the case, especially now.”

With artificial intelligence, scammers can mimic voices and create very realistic appeals designed to tug on victims’ heart strings; urgently seeking help, for example, needed by a beloved family member, he said.

In another situation, a victim might receive what appears to be an inadvertent text from someone claiming they are looking for somebody else, “and they apologize for interrupting our day,” Greenwood said. “And then they suck you into a conversation online, and, before you know it, you’re intrigued by what they are telling you is a wonderful investment opportunity. So, unfortunately, greed then becomes another factor in why people become victims of fraud.”

Some people worry about missing out on a golden opportunity to resolve their financial troubles, “and people just cannot resist that temptation to find out more and when they start asking questions, they become hooked into this belief (that) I’m gonna get rich,” Greenwood said.

Scammers really “are very clever at identifying weaknesses in our personality or finding interests in our personal life that we feel we will bond with someone else who shares the same interests,” he said.

Some scammers are almost like trained psychologists in knowing what buttons to push with their victims, he said. “They know how to overcome people’s defenses. They’re very good talkers. Sometimes they’re very patient.”

“In many of these situations, they will spend months grooming a victim before they even ask them for money because they have been able to spend the time to build up a trust and the relationship online with the victim before they move in for the kill,” he said. “I have been astounded at how patient they are and how meticulous they are finding out as much information about the person.”

He warned that people are more at risk of being targeted by scammers if the potential victim has a substantial online social media presence, Greenwood said. “And then of course the scammer will use the information they’ve got about you to create this false personality about themselves, where they will try to identify themselves as having similar interests.”

One common scam tactic is to call victims late at night or early in the morning when they’ve been sleeping and have trouble thinking straight. “They will do what they can to catch you unawares,” he said. “And then it can often be the sense of urgency that they will instill in you, and that’s where the panic sets in, and that’s where logic seems to disappear.”

The con artists might say, for example, to a potential victim that he will be arrested within the next five hours unless he pays a delinquent IRS tax bill; or a victim might have only 24 hours to respond to being picked as a second-place winner in a sweepstakes and needs to pay taxes, according to Greenwood.

Scammers who recognize some hesitancy or fear in a victim’s voice might encourage him or her to go to a bank to withdraw money, and Greenwood said, “they’ll say, ‘Don’t worry. I’ll be with you. Keep me on the line in your purse so I can listen… and just know that I’m there with you.'”

In one heart-breaking case, a couple lost $700,000 in an Amazon scam that involves alarming victims about “suspicious charges” on their accounts.

“Not only have they lost the majority of their life savings; the wife has spiraled downhill into a severe cognitive impairment to the point where she’s in a memory care unit and can hardly put two sentences together,” Greenwood said.

Being a victim of fraud is almost like being stabbed or shot; “it’s a violent crime,” he said. “And I think we need judges in courts to understand that when we’re dealing with a fraudster, it’s a violent crime, and they need to appropriately hold the fraudster accountable.”

Sadly, some victims have taken their own lives because they’ve felt hopeless and embarrassed after losing their savings and their homes, in some cases, he said.

“They feel like there’s nothing worth living for,” he said.

Elderly people are often targeted as scam victims because they’ve build up a lot of cash savings, own their homes outright; and they come from a generation “that was more trusting, more accepting of a handshake, less willing to be cynical about the person they’re dealing with,” he said.

Five years ago, the success rate at prosecuting scammers was “almost nil,” Greenwood said, a situation that led to a paradise for con artists: a wide horizon for successful ripoffs and almost no chance for getting caught.

There’s “arrogance to the point where they believe they’re not touchable, particularly when they’re operating from overseas they think they’re out of reach,” he said.

However, that’s changing, he said. “Thankfully, some segments of law enforcement are getting better at following who these people are.”

Various US Attorneys’ offices around the country have been successful in identifying criminal rings that operate scams internationally. Some have been located in India, West Africa or elsewhere overseas. Suspects have been extradited and brought back to the United States for prosecution, Greenwood said.

After Greenwood’s presentation, Mary Jane Balubar said she found it enlightening about scammers, but also “at the same time, very scary.”

“This presentation makes me more aware of the length scammers will go through to get what they want and to be more cautious of opening emails and text messages and answering phone calls from people/businesses I don’t know,” she said.

AARP volunteer Bill Staton said the event was standing-room-only. “Those who attended are now much less likely to get scammed, and much more likely to tell friends/families how not to fall for scams as well,” he said.

For more tips on fighting fraud, visit the AARP Fraud Watch Network website at aarp.org/fraudwatch. The network also offers a helpline to report fraud and support victims at 877-908-3360.