Obviously, these sorts of frauds 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 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 regularly warns about fraudulent solicitations, especially in the social media, immediately after a natural disaster.
Some of these scammers will claim to represent charities you’ve never heard of. 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. They 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. 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 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?
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, a legitimate charity will have tax exempt status. You can check that with the Internal Revenue Service. Its list of organizations so recognized are 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, it’s probably fraudulent. 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, the charity is 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
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 by pretending 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 a scam as a result. 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.