Con Men Eager to Compound Disaster

By the third day after the earthquake, San Francisco Dist. Atty. Arlo Smith had to issue public warnings about the thieves and con men who had surfaced, instantly, to rip off a stunned populace.

For all the good they bring out in people, natural disasters apparently bring out some bad as well. Like volunteer relief workers, thieves and con men are drawn to major disruptions. Even honest businesses, inherently opportunistic, are aware that when they do good they do good for themselves as well.

Areas untouched by a disaster are not untapped. Their residents know that next time it could be their disaster, and, fearful, they make a fertile market for exploitation.

Some of the trouble in San Francisco is not exploitation, but out-and-out theft--what Smith calls “home invasion schemes.” Working in pairs, the invaders pose as utility employees conducting an inspection (or relief workers or building inspectors). Once inside a house, they ask for change of a bill, note where the householder goes for the money and then, while one occupies the homeowner with some trumped-up problem, the other steals his money.

More common yet are the kind of consumer rip-offs practiced in normal times and the “perennial favorites after a tornado or a flood,” says Diane Ward, spokesman for the Council of Better Business Bureaus in Arlington, Va. Wherever disaster has struck or threatens, “99% of it is going to be something to do with home repair,” says Herschel Elkins, California’s assistant attorney general in charge of consumer protection.

In the wake of Hurricane Hugo in South Carolina, “con artists would scan a neighborhood,” says Brandolyn Pinkston of the state consumer affairs department in Charleston, “get four or five people to pay them $400 or $500 up front, and never be seen again.” Many con artists are transients with no local address or connections--in other words, “someone against whom you have no recourse,” she added.

People whose homes were just damaged tend to rush into repairs, and officials in both South Carolina and California were quick to issue warnings: Within two days, California’s Contractors State Licensing Board had blanketed the quake area with a flyer, “Earthquake Damage Repair--Don’t Get Nailed.” Both states urge consumers to check whether a contractor is licensed, get several bids, and put up very little money (“A reputable local contractor can usually get credit and doesn’t need money up front,” says Pinkston).

Disaster victims may also be visited by fake insurance adjusters claiming that for a fee, or for a percentage of the insurance money, they can get the homeowner more insurance money. They may do nothing; they may help fill out a claim request. South Carolinians also had con men “posing as FEMA (Federal Emergency Management Agency) agents,” says Pinkston, “telling people they could hurry through their request for a certain amount of money.”

Price gouging is even more common, if less costly, given the size and value of the goods involved. Packages of flashlight batteries were sold for as much as $8 each in the Bay Area. In Charleston, a 79-cent bag of ice went for $12 and generators brought as much as $3,000 each. Price gouging is usually not addressed by specific laws, and only the most egregious cases would be prosecuted under state laws forbidding unfair and deceptive trade practices. During the emergency, South Carolina’s governor issued an executive order prohibiting “excessive overcharges” on items of necessity--defined as food, fuel, shelter and items used for protection of life or property. Overcharging was defined as a price “substantially in excess” of regular price or cost.

Those same flashlight batteries now might be sold in Southern California for the same $8, plastic-bagged and labeled “Earthquake Preparedness Batteries.” But that’s not price gouging. “That’s merchandising,” says Smith wryly.

Merchandising and price gouging come very close, of course, and there may be an equally fine line between helpfulness and opportunism. Southern Californians, the most empathetic of earthquake observers, already see and hear a lot of quake-related ads--from a closet organizer offering “earthquake supply cabinets” of inch-thick fiberboard at $250 to $300 a cabinet, from a supermarket urging that everyone “stock up” for “earthquake emergencies” and outlining how to fill a $9.99, 32-gallon trash barrel with survival necessities, from a public TV station selling a $24.75 videotape of its show “Surviving The Big One.”

Then there are all the people selling “survival packs” and “preparedness kits” filled with little water pouches and dried food packets and Mylar space blankets and light sticks. These even contain emergency “beaded work gloves” and emergency books on “Coping with Children’s Reaction to Disaster.”

Some of these offerings permit analysis and price comparison. Sparkletts’ Earthquake Preparedness Package, for example. For $19.50 you get 12 one-gallon bottles of drinking water, a 50-hour “safety candle” and a four-hour “safety stove” (a little can of a “nonalcohol cooking fuel” even Sparkletts cannot identify). This is not ordinary bottled water, which is cheaper but has a shelf life. It’s specially sealed to be fresh until the seal is broken, and the price includes boxing for storage and delivery.

The convenience alone is worth the money to many people. It may even be worth the money--and it’s often considerable money--when they’re buying kits with all those little packets of substances that they can hardly understand, let alone compare to anything they’ve ever bought before. Indeed, most consumers who were asked about such purchases said they are well aware they could assemble their own kits for much less money, but haven’t done it yet, aren’t doing it now and probably will never get to it.

More to the point, they don’t need it yet--the difference, perhaps, between a choice and a necessity, between merchandising and price gouging. But they should probably exercise that choice while they have it.