With the rise in the quest to lead a luxurious lifestyle, the hunger to earn money is also increasing day by day. People who have no access to jobs or are unqualified are finding new ways to earn money. Most of the individuals are resorting to crimes and fraudulent ways to earn money. Fake charity organizations fall under a similar bracket which are experts in conning innocent people. The scam committed by these organizations is often given a term as ‘Charity Scam’.
What is Charity Scam?
Charity scams are basically scams which are conducted in the name of genuine charities. They extract money from people in name of some fake organization which claims to work for a charitable cause. In reality, no such charity exists and the scammers vanish away with collected money which is usually a really large amount. These scammers take advantage of your generosity and steal away your hard-earned money. Theses scams not only cost you dollars but also divert your attention from the genuine charities which are in real need of charity. Fake charity scammers mainly propagate during times of natural disaster or calamities such as floods, earthquake, tsunami, tornadoes etc where they pose as genuine charity organizations. It’s hard to notice in those vital times where people are emotional owing the recent events of the disaster. When people realize that they have been scammed it’s too late. Cancer Fund of America and its three affiliates were accused by Federal Trade Commission of looting $186 million between 2008 and 2012.
People with generous instinct fall easy prey to these scams. Hasan Alpaii from Hamtramck, Michigan was scammed of $1250 in name of the ‘Charity for Needy Children’. He is a local business owner in Hamtramck and this proved a massive blow to him
How do Charity Scams Happen?
Charity scams mainly happen in times of natural calamities or disaster because the chances of getting donations at that time are really high. These fake charities may be in the form of donations for food, medical care, and even direct call to ask for money. These scammers approach people in multiple ways which include making fraudulent calls on phones, distributing pamphlets, setting up fake websites or sending emails requesting money for donations. These scams mainly play with the emotions of people tricking them into their scam. Scammers often pose as legitimate charities and trick people emotionally by demanding donations in the name of ill children and other major diseases. This whole scam works only because people fail to notice that they are being tricked and thus no complaints are made first hand to the police or any other law authority so actions could be taken.
Kensington Church in Troy, Michigan was scammed of $4500 in October 2017 in name of Hurricane Victim Donations. The scammer reportedly posted a fake $4500 cheque and alleged that he meant to pay $45 but deposited $4500 by mistake. The church then refunded the amount, later discovering that it was a scam.
How Can Charity Scams Steal Your Identity?
Charity Scams are a gateway to identity thefts. The scammers are very clever in coming with names which seem like real charities. They might pose in the name of some wildlife charity aiming to protect endangered species such as ‘ Save the Bears’ or ‘ Save the Sharks’. They may further send you an email with the link to their website which might seem very well organized and genuine. The website may contain photos of charity work done and some registered papers to offer proofs of further being genuine. By this time most of you will be convinced that it’s a genuine organization. Next, the website will prompt you to offer your credit card details to deposit the donations. Further, they may also ask for your mailing address to send you a copy of the receipt. Once you press the ‘Submit’ button you have probably given them all the access to your vital information which they can use to their advantage.
Warning Signs of Fake Charity
Although scammers use multiple ways to approach for donations there may be signals which might help you notice that they are fake.
- The name of their charity sounds much similar to some other legitimate charity.
- They refuse to disclose how the collected donations will be used towards the cause of charity.
- They pressurize you to offer donations by making you feel guilty that you don’t donate often.
- They don’t provide you with a receipt or some hard copy which has the name of charity on it.
- They stress on taking donations in cash and denying other methods of payment.
- They refuse to offer you their tax-deductible
- They try to lure you by guaranteeing winnings once you do a deposit.
- The person calling you refuses to give his identity or even he does it sounds bogus or fake.
How to Protect Yourself from Charity Scams?
- Do some research online about the charity mentioned and google it with words like ‘scam’ or ‘fraud’ before proceeding for donations.
- Avoid any interaction with a stranger which demands donations through international bank wire, online money transfer or bitcoins. It’s very hard to recover money through these means.
- Always take full information of the charity that includes their name, address, and phone number.
- Look up the organization on the IRS website: https://apps.irs.gov to check if they can legally receive tax-deductible donations.
- Check the name of the organization with other organizations such as GuideStar, Wise Giving Alliance, Charity Navigator and Charity Watch.
- Beware of charities which offer to pick up donations from your home.
- If you are approached by an unfamiliar sounding charity then ask your local or state consumer protection agency to have access to the information of the charity. Most states require charities to register with them so that they can monitor their donations annually.
- Beware of advertising banners which immediately pop after the disaster. The plea in these advertisements often seems very urgent and bogus. So, keep a watch on that.
- Learn the difference between ‘tax-exempt’ and ‘tax-deductible’. Tax-exempt means that the organization does not have to pay any taxes whereas tax-deductible means that you can deduct your donation on your income tax return.
- In case of making donations online, keep a watch on the URL. If the domain looks cheap and snappy, then most probably it’s a scammer’s website.
- Check the information about the charity with the Better Business Bureau or http://www.give.org to check if the charity is registered in your state or not.
- Consider making an annual donation plan instead of making sudden decisions which might cost you.