Obviously, these sorts of frauds are particularly insidious because 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 they 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 particularly warns against solicitations in the social media immediately after a natural disaster.
Some of these scammers will purport to represent charities you’ve never heard of, while the boldest among them may claim to represent a government aid agency or something that sounds like one but actually doesn’t exist. The worst of them will actually claim they’re from legitimate, well-known organizations like the Red Cross or Salvation Army and set up fake websites incorporating the names of those 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. A fake Salvation Army website collected almost $50,000 in donations.
The scammers behind these frauds may call you at random, or perhaps you might be compelled to respond to an internet ad they placed or you may even stumble across a sympathetic-looking but completely phony website promoting a charity that supposedly cares for the needy, especially disadvantaged or starving children. The content is custom written to appeal to your generosity and make you feel guilty if you don’t respond.
How Can You Tell if the Charity Is Legitimate?
First, check to see if they are registered as charities or non-profit organizations. In England and Wales, there is a Charity Commission that licenses them. In the United States, they would have been granted tax exempt status by the Internal Revenue Service. The lists of organizations so recognized are public and available to everyone. All industrialized countries have parallel structures, as do most others. There is nothing wrong about saying you’ll get back in touch with an anonymous caller after you confirm his credentials. If he objects, take that as a sign that the organization he purports to represent is illegitimate.
Second, all genuine charities and non-profit organizations have boards of directors. If you have been directed to a website that doesn’t list its directors, it’s probably fraudulent. If they do list names of people, they should also provide identifying information such as their professional backgrounds, cities of residence and 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 that, the charity is suspicious at best and fraudulent at worst.
Third, reputable charities post their annual reports online. The annual report will provide financial statistics such as the amount of contributions received, the amount of funds distributed and the projects that are underwritten by those funds. 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.
Fourth, double check. If they claim to be associated with the Red Cross, call your local chapter of the Red Cross to confirm that this is one of their projects. Same, of course, for the Salvation Army and any other volunteer organization. If the charity is legitimate, they will be happy to confirm and accept your donation. If they claim to be affiliated with a specific religious denomination, call its national headquarters, or even a local clergyman or house of worship to confirm. If they claim to be doing charity work in a foreign country, contact that country’s embassy, which, if they don’t know off the bat, can certainly confirm or deny it by inquiring with officials back home.
Remember, you are not making lives better for suffering people by assuming the best and handing money over to a scam as a result. Even if confirmation of the charity’s legitimacy takes a few days, your contribution will still be much appreciated and be put to good use.
If you think you have been victimized by a charity scam, consult with our fund recovery experts at MyChargeBack.