Avoiding Charity Scams
January 25, 2022
According to a survey put out by Lending Tree, 56% of Americans donated to charity in 2021. That generosity supports the various organizations putting these donations to work for health care, education, environmental protection, the arts, and numerous other causes.
Unfortunately, it also opens the door for scammers who capitalize on the goodwill of American citizens to line their own greedy pockets.
Every year, we hear about new scams involving faux fundraising for things like veterans, disaster relief, and other charitable causes. Scammers know how a sad story about someone rebuilding after a hurricane or someone coming home after serving our country can turn off the skeptical parts of our brains and get us to open our hearts and wallets to them. Charity scammers are especially active during the holidays since it's the biggest giving season of the year.
Consumers can protect their contributions and prevent becoming a victim by learning how to identify a charity scam.
Red Flags for Charity Scams
- Similar Sounding Name – Scammers will often use names that sound similar to legitimate charities to intentionally create confusion for consumers.
- High Pressure – Fraudsters will try to force a hasty decision by creating an atmosphere of immediacy. They may cold call, identifying you as a previous giver, and ask you for renewed support or to update your credit card information. In these situations, they are attempting to catch you off-guard and extract your financial information.
- 100% Guarantee – Every organization has some level of administrative costs. While most people want to ensure their donations are going toward legitimate program expenses, an organization that promises 100% of your funds are going directly to an individual in need might require additional scrutiny.
- Donation via Wire Transfer or Gift Card – Legitimate charities will not ask you to make payments via money order, wire transfer, or gift cards. If you are asked to pay by these means, hang up immediately. Never provide the information from a gift card over the phone or email; after verifying the legitimacy of the charity, take any gift card donation directly to the location of the charity and request documentation of your contribution.
Here are some tips that can help you avoid falling prey to a charity scam:
- Always research before giving!
- Visit the PA Department of State's online charities database to verify an organization's financial information concerning expenses for program services, fundraising, and management.
- You can check to see if an organization has been subject to corrective action by the Bureau of Corporations and Charitable Organizations by checking its enforcement and disciplinary actions page.
- Check whether an organization is registered with the Internal Revenue Service as a Tax Exempt Organization.
- Groups such as the Better Business Bureau (BBB) Wise Giving Alliance, Charity Navigator, and CharityWatch offer information and ratings about charitable organizations.
- Don't feel pressured to make a donation on the spot. Take time and do your research before sharing personal or financial information or sending money.
- Check websites very closely. Scammers can direct you to fake charity websites where personal and financial information are taken for nefarious purposes.
- Avoid wire transfer, money order, or gift card donations. Any requests for these kinds of payments should send up immediate warning flags.
- Direct your payment to the charity. Never make a check payable to an individual; write the check to a verified organization.
If you think you've been the victim of a charity scam, you should contact the PA Department of State's Division of Charities Investigation Unit/Audits at RA-STBEICIU at pa dot gov or use the online complaint form. You should also file a report with the Federal Trade Commission at https://ReportFraud.ftc.gov and contact local law enforcement through non-emergency channels.