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06/08/20

How to Avoid Becoming a Victim of a Fraudulent Charity

We all want to help out when we are willing and able. When it comes to natural disasters, epidemics, children and families in need, or organizations for a good cause, it is very easy to want to donate your money. Now, giving to charities is always a good deed, but it is important to make sure your money is going into the right hands. Fraudulent charities are unfortunately very common and seek to take advantage of those who are willing and able to give back to those in need. 

Fraudulent charities can look very similar to established charities, and even have websites and emails associated with them to make them look legitimate. After Hurricanes Harvey and Irma, the National Center for Disaster Fraud received more than 400 complaints of fraudulent activity relating to charities1.

Fortunately, there are things you can do to help prevent becoming a victim of a charity scam.

Do Your Research

While doing research online, include phrases such as “best charity” or “highly rated charity” along with your search. After choosing the charity you would like to donate to, it can be helpful to do a follow-up search with that charity name followed by phrases such as “scam” or “review” or “rating” and look through the information that pops up2

You can also reference third-party websites, such as Charity Navigator and Give.org, which is maintained by the Better Business Bureau, to check the legitimacy of charitable websites.  

Also, it is always okay to ask the organization questions when it comes to where your money will go. Wise Giving Alliance suggests a rule of thumb that states at least 65 percent of a charity’s total expenses should go directly to serving its mission3

Donate Carefully

No one wants to have their hard-earned money fall into the hands of a sham charity or bogus organization, so there are a few things to look out for when it comes time to pay. Scammers will try and snatch your money by asking you to pay with gift cards, cash, and wiring money, which is hard to trace. It is much safer to pay with a credit card or check as well as making note of each donation to easily keep a record and make sure you are not being charged for more than what you had agreed to on2. And remember that legitimate charities won’t put pressure on you to make a donation nor will they send a Thank-You for a donation before it has been made. 

Legitimate Charities Won’t Ask For Your Personal Information

Make sure to never give personal information such as your social security number, date of birth, or bank account number to someone who is soliciting a donation.3 Not only can these fraudsters steal your money, but they can also attempt to steal your identity as well. 

No one wants to think that people would capitalize on other people’s hardships, but it is an unfortunate reality. These tips can help you spot a con and make sure your money is going exactly where you want it to go. If you do come across a fraudulent charity or have been scammed yourself, you can report this to FTC.gov/complaint and find your state charity regulator at nasconet.org to report to them as well2.

  1. https://www.fbi.gov/news/stories/bogus-charity-operator-sentenced-101918
  2. https://www.consumer.ftc.gov/features/how-donate-wisely-and-avoid-charity-scams
  3. https://www.aarp.org/money/scams-fraud/info-2019/charity.html

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