Protecting Small Businesses from post-disaster scams – Sam Levine | FTC

In the wake of natural disasters, small businesses are often left vulnerable to a second wave of challenges—fraud and scammers eager to exploit their misfortune. On today’s edition of the SBA Update, we speak to SBA Regional Administrator Allen Thomas and FTC Bureau of Consumer Protection Director Samuel Levine about how entrepreneurs can safeguard their businesses and avoid falling victim to these exploitative schemes.

In this insightful conversation, Allen Thomas and Samuel Levine discuss the critical issue of fraud that follows natural disasters. Thomas, drawing from his extensive experience in disaster response, highlights the rise of fraudulent contractors who prey on desperate small business owners by offering low-cost services that ultimately lead to financial loss and further disruption. He urges small businesses to seek trusted resources such as local government offices or FEMA for verification before engaging any service providers.

Levine, focusing on the Federal Trade Commission’s efforts, explains how the FTC works to protect both consumers and small businesses from deceptive practices. He advises firms to familiarize themselves with common scams, including cleanup and repair frauds and imposter scams, which often see fraudsters posing as government officials. He emphasizes the necessity for organizations to take proactive steps, such as training employees, backing up data, and keeping insurance policies current, all of which reduce risks following disasters.

Both experts emphasize the importance of vigilance, recommending resources like FTC.gov and SBA.gov, which offer comprehensive disaster preparedness and recovery guidance. They stress that while disasters bring immediate challenges, having the right resources and knowledge can help businesses bounce back quickly and securely.

"As a former mayor and someone who has dealt with disasters throughout the Southeast, I want to emphasize the importance of being vigilant about vendors. Some unscrupulous individuals come to your door, offering services at half the cost and then disappearing after taking your money. We want to make sure businesses know where to report these issues and get on the right path to recovery." – Allen Thomas