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After the Hurricanes...

In the aftermath of natural disasters such as Hurricanes Katrina, Rita and Wilma, people have a great need for assistance in putting their lives back together.  A situation of this proportion also gives rise to marketing and home improvement scams, deceptive door-to-door sales, price gouging and solicitations for non-existent charities.  The information below may help consumers avoid many of these problems and begin the process of recovery.  

Charitable Solicitations
It is impossible to see the devastation caused by the recent flooding without wanting to help its victims.  Many charities and nonprofit organizations are springing into action and collecting assistance for victims.  Unfortunately, this time of need is also a time when con artists seek out easy prey.  

If you want to donate money and ensure that your money helps people truly in need, remember a few simple rules for smart giving:

• Contribute to organizations you know.  Do not fall for copycat names.
• Although timing is critical in responding to disasters, don't succumb to pressure in making an immediate donation without first checking out the charity.  Fraudulent solicitors often demand on-the-spot contributions and rely on the fact that contributors won't question their efforts.
• Watch for Internet and e-mail hurricane relief scams.  While some appeals are certainly legitimate, all too often they are schemes to defraud you, steal your personal information or introduce viruses to your computer.
• Ask questions about where your money will go and how it will be spent.  Not all charities soliciting disaster relief are providing direct services to disaster victims. 
• Above all, check out the organization through both the Secretary of State's Office and the Better Business Bureau. 

For more detailed information about charities, as well as the procedure to file a complaint about a charitable solicitation, please click here. 

Avoid Purchasing a Flood-damaged Vehicle
Consumers should be warned that many previously-flooded vehicles are recycled into the economy and end up being resold.  In the months following Hurricane Katrina and Rita, a large number of such vehicles are likely to be released into the marketplace.  These may have been the property of dealers, fleet owners, or individuals and may have been written off as “salvage” or “totaled” by insurance companies in other states, though this may not appear on the title.

A musty odor may be noticeable, or rust and silt may be hidden in the crevices.  But with new upholstery and carpeting and perhaps some body work, the damage may be very well disguised and difficult for even a professional to detect.  Nonetheless, electrical problems are practically guaranteed, and the brakes, airbags and computer system may have been seriously compromised.

If you are in the market for a used car, truck, van or SUV, be vigilant for signs of flood damage in the vehicle you are considering purchasing.  Check the upholstery, dashboard, glove compartment, trunk, inner doors, engine area, air filter, and under the seats and carpeting.  Look for drainage holes beneath the car, and check gauges and the flexibility of the wires below the dash.  Test and retest the ignition, lights, wipers, air conditioner, heater and all accessories.

As with any used vehicle purchase, have the car examined by a trusted mechanic before you pay any money for it.  In addition to checking the title for any notation of flood damage, you might consider requesting a vehicle history report, using the VIN number, from www.CARFAX.com or Experian’s www.AutoCheck.com.  

Price Gouging Issues
The statutory price controls are no longer in effect in Georgia.  The August 31st declaration of a state of emergency immediately activated Georgia's price-gouging statutes (O.C.G.A. Sections 10-1-393.4 and 10-1-438) which remained in effect through and including midnight on October 14, 2005.  

During a declared state of emergency only, Georgia law prohibits businesses from taking advantage of the situation to engage in price gouging.  Businesses may not sell any goods or services necessary to protect your health, your safety or your property at prices higher than the prices at which those same goods or services were offered before the declaration of a state of emergency.  This can include gasoline, food, lodging, propane gas, lumber and other supplies.  Nor may a business raise the price of supplies or services for the purpose of salvaging, repairing or rebuilding structures damaged as the result of a natural disaster.  Increases are only permitted that accurately reflect increases in the cost of new stock or the cost to transport it.  

Debit Card "Holds"
It has been the norm for years that, when you give your credit card for advance payment authorization by a hotel or rental car company, a “hold” is placed on your account to cover the anticipated charges.  The same is true now if you use the popular debit or check card, particularly for hotels, rental cars and even restaurants.  The bank places a hold on your account as a means of assuring payment to the merchant and making sure you don’t spend more than you have.  This standard precaution can be compared with requiring presentation of a driver’s license for check payment purchases. 

Where the practice has attracted the most attention lately is with motor fuel purchases.  As gas prices have bolted to record levels, American motorists are also conserving cash, if not fuel, by using debit cards at an unprecedented rate to pay for gasoline purchases.  According to an estimate by the National Association of Convenience Stores, nearly 80 percent of customers were paying with some form of “plastic” as of October 2005, and this has wrought certain hardships on some debit-card users.  With fuel prices increasing so dramatically, retailers are now holding $50 to $100 to cover the average tank of gas.

The merchant sets the amount of the hold, but the bank that issued the card is responsible for the length of time of the hold.  While the hold with the merchant generally lasts for not more than a day, some credit card companies allow up to three days for banks to clear transactions and remove the hold, which may affect your spending limit during the processing period.  If you do not allow for this, some checks could bounce even though the money is in the account to cover them.

How can you speed up the hold time and avoid having use of your card denied when you know you have a sufficient bank balance?  Use your personal identification number (PIN), rather than a signature-based transaction, with your debit card for greater security and an immediate release on the hold.  If you use your PIN and the display reads "Authorizing…" after you swipe your card, the normal money hold is being charged to your account.  In the case of a gas purchase, the hold should change to the actual amount after you finish filling your tank.  Pay inside for gas purchases if the pump does not have a PIN pad; or consider paying by credit card instead.

Also present your credit card up front for hotel stays or car rentals of more than one day.  When you pay your final bill, using a debit card is fine, because the exact amount should then be charged to your account.

It would be a good idea to ask your bank about its policy on the length of debit holds.  If a hold lasts longer than a few minutes for a PIN-based transaction or a few days for a signature transaction, ask why.  Make it a regular habit to monitor your online bank statements, and call the bank if you notice any problems associated with debit transactions.

Other Consumer Information
For general consumer information on a variety of topics, please see our subject matter list.

To help the families and businesses affected by Hurricane Katrina nad Rita, the Federal Trade Commission (FTC) has launched a web site featuring important information about scams people might encounter, their rights, and links to other organizations that have important information about relief for Hurricane Katrina victims.  The page lists hurricane assistance information pepared by the FTC, as well as links to a broad range of programs offered by non-governmental organizations.  A Spanish version of the web site is also available.