Ashes Are Con Artists’ Gold Mine : Aftermath: Multiple fires signal prime time for illicit contractors and other quick-buck operators.

While a major disaster can bring out the best in people, in some cases it brings out the worst.

Hundreds of Southland fire victims are especially vulnerable to becoming victims again--this time of con artists and fraudulent contractors.

“We’ve seen this time and time again throughout the state, after earthquakes and after the Oakland Hills fire,” said Louis Bonsignore, spokesman for the state Department of Consumer Affairs in Sacramento. “Every time there is a disaster, scam artists view this as a prime time to make a quick buck.”

So far, officials in Los Angeles and Orange counties said they haven’t received reports of fire-related scams. Nonetheless, they outlined steps to avoid schemes that typically follow major disasters.

For fire victims, the most common scams involve unlicensed contractors who promise to rebuild or repair a home but don’t perform quality work, or walk away, after taking a sizable deposit.

Bonsignore said you should check to make sure that a contractor is licensed. Unlicensed contractors may not have workers’ compensation insurance, which means that property owners may be liable for injuries.

However, officials suggested, check a contractor’s references and get all agreements in writing, because mere possession of a license is no guarantee that the contractor is reliable.

Ted Bissell, an investigator with the Los Angeles County Department of Consumer Affairs, advised against making lump-sum payments to contractors. He said you can get further protection by insisting that contractors take out a completion bond, an insurance-like instrument that covers construction costs if the contractor fails to complete the job.

Bissell also cautioned that fire victims who need rebuilding funds should beware of door-to-door loan brokers, or so-called hard-money lenders, who charge big fees and high interest rates. Many of these lenders demand liens on the property as collateral.

Falling real estate values may have left fire victims with little or no equity in their homes, Bissell said, making them vulnerable to pitches from hard-money lenders willing to provide them with the down payments needed to rebuild. He said you can check with the Department of Corporations or the Department of Real Estate to see if these brokers are licensed.

Homeowners should also be wary of trying to rebuild quickly.

“They rush and get new loans they can’t afford or they go to the first contractor they see,” said Steven Schandler, psychology professor at Chapman University. “They’ll do anything they can to regain control over their lives.”

Take time out before deciding whether to rebuild and discuss your situation with federal emergency officials or loan officers from your bank, Schandler suggested.

Lona Luckett, director of operations at the Better Business Bureau of the Southland, warned of possible job scams that prey not on fire victims but on the unemployed. After the 1991 Oakland Hills fire, which destroyed more than 2,700 homes, and last year’s Florida hurricanes that leveled some 47,000 residences, con artists published ads promising lists--for only $50--of hundreds of rebuilding jobs. All the hopeful workers received were lists of construction companies, Luckett said.

Among the first scams to appear in the wake of disasters are charity scams, in which con artists prey on the sympathies of people who want to help fire victims. Before donating, check to make sure a charity is licensed to collect for fire victims.

The Los Angeles Department of Social Services maintains a telephone hot line you can call to check on a charity. The number is (800) 773-6628.

Vrana is a correspondent in Orange County and Gellene is a Times staff writer in Los Angeles.