Have you been asked to donate to a charity? It may be an organization that sounds familiar or one that you’ve never heard of. They may say they are calling about a good cause, but they can’t tell you simple details, like how your donation will be used. They may say the charity only accepts cash or push you to donate immediately. If so, they may be a charity scammer.

While these scams can happen at any time, they are especially prevalent after high-profile disasters. Criminals often use tragedies to exploit you and others who want to help.

Charity fraud scams can come to you in many forms: emails, social media posts, crowdfunding platforms, cold calls, etc.

What is Charity Scam?

Charity Scam is the act of using deception to get money from people who believe they are making donations to a charity. Often a person or a group of people will make material representations that they are a charity or part of a charity and ask prospective donors for contributions to the non-existent charity.

Charity fraud not only includes fictitious charities but also deceitful business acts. Deceitful business acts include businesses accepting donations and not using the money for its intended purposes, or soliciting funds under the pretense of need.

Scammers may use high-pressure tactics, such as threatening that a donation is needed immediately to help with an emergency, to convince people to give money.

It is important to note that not all charities are scams, but it is wise to be cautious and do some research to make sure that the charity you are considering is legitimate, and that your donation will be used for its intended purpose.

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WARNING SIGNS OF CHARITY SCAMS

Cash, Money Wire, or Gift Card Donations:  Were you asked to donate only in cash, to wire money or send gift cards?  Then the person is probably a scammer.  Once you send cash or gift cards, you can’t track it or get it back.  Always donate by check or credit card.

Requests for Personal or Financial Information:  Never provide your personal information (bank account number, Social Security number, etc.) to strangers.  They may use this information to steal your identity.

Donation Is Not Tax Deductible:  If a group can’t give you proof (usually a receipt or letter) that your donation is tax deductible, it may be a scam.  But remember, when you give money to crowdfunding sites the gift isn’t usually something you can list as a tax deduction because the recipient is not a registered charity.

Fake Information:  Often scammers will imitate the name, phone number, webpage, or materials of a real charity.  Never trust contact information that a caller gives you directly.  Always do your own research to locate this information.  Most charity web addresses end with .org and not .com.  Avoid web addresses that end in a series of numbers.  Never enter your personal information, such as date of birth or bank account information, on any website unless you’ve done your own research to make sure the website is legitimate.

Pressure Tactics:  Scammers may pressure you to give right away.  Don’t give in to their demands!  Ask the organization to send you materials first.  Always take your time and research a group that you don’t know before giving them money or personal information.

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Strange Requests:  What if the request for money seems real, but you’re just not sure?  Be careful!  Never give money right away, even if it seems to come from a person or group that you know.  Be mindful of opening any attachments in emails.  Are words misspelled or missing?  Are things said in a weird way?  Contact the organization directly by using a charity evaluator site.  DON’T respond to the message.

HOW TO AVOID CHARITY SCAMS

Research:  Always research a group before giving them money.  Search for them online.  Use a charity evaluator organization such as www.charitynavigator.org to research charitable organizations and obtain contact information.  Look for the group’s name and see if the words “scam” or “complaint” come up, too.  If they do, then the “charity” could really be a scam. If they say they are a part of a well-known group, contact that group directly using information you know is correct (from a legitimate website or phone book).

Know Where Your Money Is Going:  Many charities hire fundraising organizations or other organizations to help them raise money.  While that is not necessarily a scam, it is important to realize that part of your donation will likely be used for administrative or other costs.  Before giving, research how much of your donation will go directly to the charity.

Ask About Registration:  In Tennessee, a charity that is asking for donations must be registered with the Tennessee Secretary of State.  If the organization is tax-exempt through the IRS, it should be able to give you its Employer Identification Number.  Check the Secretary of State’s and the IRS’s websites to see if the charity is really registered.  Be careful, though: sometimes even scammers may be registered.

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Document Your Donations:  Always write down when you donated, who you donated to, and how much money you gave.  Writing down your donations will help you be on the lookout for scams that claim you already donated to them, even though you didn’t. 

WHAT TO DO IF YOU BECOME A VICTIM

Document it:  Write down anything you remember about the conversation you had or message you received that encouraged you to donate to the charity.  Be sure to include:

  • Name of the person who asked for a donation;
  • Name of the group or person they said were raising money for;
  • Date it happened;
  • Any contact information (the organization’s address, number, email address or the caller’s phone number);
  • If you donated, write down how much you gave and how you gave it (cash, gift card, credit card);
  • How you were approached to donate (through an email, social media, text, phone call, or in person);
  • List of any sensitive financial or personal information you provided (such as your Social Security Number or banking information); and
  • Anything else that you believe is useful.

Take Action and Report:  Both state and federal agencies have ways to help you report an incident of charity fraud.

References;

https://www.tn.gov/attorneygeneral/working-for-tennessee/consumer/resources/materials/charity-scams.html

https://www.fbi.gov/how-we-can-help-you/safety-resources/scams-and-safety/common-scams-and-crimes/charity-and-disaster-fraud