I remember that Northridge earthquake as well. Totally ticked me off that a well-off acquaintance decided that this was a good way to finance repairing the cracked driveway that she'd been complaining about for two years. It worked.
And I have no clue as to what the answer is - if the money is too hard to get, then the truly needy will suffer, and if it's too easy, these scam artists (and, BTW, I don't like this article's insinuation that they are all poor & Black. The case I mentioned, as I suspect the ones you did, are fairly wealthy whites) get what they don't deserve.
I can't imagine finding a way to get it perfectly right.
What part of that article even implied that?
I reread it and there is nothing in it that could remotely be inferred that they are talking about "poor and black".