Charity scams are particularly insidious. They exploit the most altruistic while punishing the most vulnerable.
Scammers won’t stop for anything. Charity scams are a permanent fixture among fraudsters. But fake charities are especially quick to pop up right after a major natural disaster like an earthquake, a hurricane, a tsunami, or a wildfire. When that’s what dominates the news cycle on TV you’ll be most inclined to respond generously. The U.S. Federal Trade Commission regularly warns about charity scams, especially in the social media, immediately after a natural disaster.
Some of these scammers will say they represent charities you’ve never heard of. The boldest charity scams claim to represent a government aid agency or something that sounds like one but actually doesn’t exist. The worst of them will actually pretend they’re from legitimate, well-known organizations like the Red Cross or Salvation Army. Charity scams may even set up fake websites incorporating the names of veteran charities in order to trick the public. In 2005, following Hurricane Katrina, the Red Cross asked the FBI to investigate 15 such phony look-alike websites. Over 1,300 scammers were indicted. One fake Salvation Army website collected almost $50,000 in donations.
The scammers behind these frauds may call you at random. Or perhaps you might respond to an internet ad they placed. You may even stumble across a sympathetic-looking but phony website promoting. The most common are charities that supposedly cares for the needy, especially disadvantaged or starving children. The content appeals to your generosity and makes you feel guilty if you don’t respond.
Check with Government Agencies to Identify Charity Scams
Check to see if your relevant government agency recognizes the group as a charity or non-profit organization. In the United States, a legitimate charity will have tax exempt status. You can verify that with the Internal Revenue Service. Its list of organizations so recognized is public and available to everyone. All countries have parallel structures.
There is nothing wrong about saying you’ll get back in touch with an anonymous caller only after you confirm his credentials. If he objects, take that as a sign that the organization he purports to represent is illegitimate.
Who Runs the Charity?
All non-profit organizations, including charities, have boards of directors. If a charity’s website doesn’t list its directors, you should assume it had something to hide. If it does name them, they will also note their professional backgrounds, cities of residence, job titles, and even university degrees. Search for these people on the internet to confirm that they exist and the information on the web site is correct.
If you cannot confirm their details, regard the charity as suspicious at best and fraudulent at worst.
Demand to See an Annual Report
Reputable charities post their annual reports online. An annual report provides financial statistics such as the amount of contributions received, the amount of funds distributed, salaries and expenses, and the projects they sponsor. If no annual report is posted on the website, consider it suspicious. This information is not private. It has to be reported to the national oversight agency to maintain tax-exempt status.
Always Double Check to Avoid Charity Scams
If a charity claims it works alongside, for example, the Red Cross, call your local chapter of the Red Cross to confirm that this is one of their approved projects. Same, of course, for the Salvation Army and any other volunteer organization. Legitimate charities are always willing to provide such confirmation. In the event they say they are affiliated with a specific religious denomination, call its national headquarters, or even a local clergyman or one of its houses of worship to verify.
Unfortunately, some scam charities attempt to make it exceptionally difficult for you to find out anything about them. One way is to pretend they direct all of their donations abroad. Fighting disease in Africa, for example, hunger in India or working with indigenous tribes in South America. If they claim to be doing charity work in a foreign country, contact that country’s embassy. If they don’t know, they can certainly confirm or deny it by inquiring with officials back home. That may take time, but being cautious is worth the wait.
Remember, you are not making lives better for suffering people by assuming the best and handing money over to charity scams. Scammers will appreciate your donation. But it will only be put to good use if the charity is legitimate.
If you think you’ve been the victim of a charity scam, contact the fund recovery experts at MyChargeBack.