Federal authorities warn of scams, price gouging as Hurricane Milton threatens Florida
Federal agencies are warning of heightened risk of scams and price gouging efforts as Hurricane Milton nears Florida’s western coast.
The Justice Department (DOJ), the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) issued a warning to consumers to be on high alert for bad actors seeking to exploit the extreme weather situations and told companies they would hold them accountable if they engage in illegal tactics.
“Companies are on notice: do not use the hurricane as an excuse to exploit people through illegal behavior,” Manish Kumar, deputy assistant attorney general of the DOJ Antitrust Division, said in a press release Wednesday.
“The Antitrust Division and its law enforcement partners will act quickly to root out anticompetitive behavior and use every tool available to hold wrongdoers accountable,” Kumar added.
The agencies outlined several exploitation tactics that companies use during natural disasters, including using supply chain disruptions as cover to “engage in collusive schemes that inflate prices” and target “customers who are under extreme stress and therefore unable to fight back against collusive or anticompetitive prices.”
They also warned of price gouging tactics for essential goods, which FTC Chair Lina Khan said the agency is already seeing “for essentials that are necessary for people to get out of harm’s way,” including for hotels, groceries and gas.
Khan said the agency is working to protect vulnerable Americans.
“No American should have to worry about paying grossly inflated prices when fleeing a hurricane. In partnership with state enforcers, the FTC will keep fighting to ensure that Americans can get the relief they need without being ripped off by bad actors exploiting a crisis,” Khan said.
CFPB Director Rohit Chopra similarly said his agency is working to hold companies accountable who engage in those tactics, calling price gouging during a natural disaster “just plain wrong.”
“Excessive price increases can be unfair under the law,” Chopra said in the press release. “The CFPB will be on the lookout for financial companies that take advantage of natural disasters to rip people off.”
The agencies said in addition to companies who engage in price gouging tactics, scammers often seize on natural disasters to take advantage of people’s desperation and generosity.
Consumers should be on the lookout for scammers soliciting donations using names that imitate charities linked to the disaster, the agencies warned. Scammers also often impersonate government officials and offer disaster relief in exchange for personal information or money, and sometimes they promote fake businesses or non-existent investment opportunities related to disaster recovery, including rebuilding or flood-proofing.
Federal officials said only scammers would ask for payment via wire transfer, gift card, payment app, cryptocurrency or in cash. They also warned that legitimate offers for disaster relief will never require payment.
The DOJ encouraged the public to report complaints of fraud online or at the National Center for Disaster Fraud’s (NCDF) hotline at 866-720-5721.