How To Avoid Being Scammed This Year
We live in an incredible time. Although the problems that people face are very serious, many of them have simple and inexpensive solutions. Both at home and abroad, we have a moral responsibility to help where we can. For most people reading this article, that means contributing money. In 2018, Americans donated more than $427 billion to charities.
Scammers rely on these feelings of goodwill and our willingness to help others to steal both your money and the positive results that your money could have provided. Many of these scams pop up around the holidays and after disasters.
Although we are all potential targets, senior citizens seem to fall victim to these schemes more often than other segments of the population. This is because most seniors are not as technologically savvy as their younger counterparts.
With some research and information about common tricks, you can avoid being scammed into giving to fraudsters. This article will provide some tips for avoiding common tricks used by swindlers in impersonating charitable organizations.
Before Giving to a Charity
You want to make sure your donations go to a worthwhile cause. Don’t give away your hard-earned money until you are sure it will (a) make a difference and (b) go to a reputable organization.
- Research the charity you wish to support by searching for it online. For example, type in “hurricane relief,” homeless children,” or “food bank” combined with “highly ranked charity” or “best charity.” If you see a lot of complaints, consider giving to a different organization.
- Ask questions to determine what percentage of your donation actually goes toward the cause you wish to support and what percentage goes to administrative fees. A general rule of thumb is that no more than 35% of your donation should go to administrative costs. Truly great organizations are below 10%.
- Go to the charity’s website to see its mission, whether it provides the programs you want to support, and how your donations are used. If this detailed information is missing, this should be a red flag.
- Most charitable organizations have websites that end in “.org” rather than “.com.”
- S. organizations should make their EIN available on the site. If it is missing, consider donating elsewhere.
- Several organizations provide ratings and help you research reputable charities:
- Most states require charitable organizations to register. You can find your state’s charity regulator at org. The state charity regulator will have information about registered charities.
- The IRS has a tool to let you know if your donation is tax deductible or not: Tax Exempt Organization Search.
Online portals let you choose a charity to support from a list of charities on the site. Donations through online portals sometimes go through an intermediary that may charge a service fee. Before you donate through an online portal, read the FTC’s article on Donating Through an Online Giving Portal, available at FTC.gov/Charity. It explains how online giving portals work and potential warning signs.
Charitable Telemarketer Calls
Registering your phone number on the National Do Not Call Registry will not prevent calls for fundraisers. Charitable organizations are exempt from having to honor the numbers in the registry. To stop calls from charitable organizations, you will have to ask each one to be placed on their “Do Not Call” list. Because of how often phone scams are used to exploit kind-hearted individuals, it is increasingly rare for a reputable organization to solicit donations online.
Organizations soliciting charitable donations have strict guidelines they must follow. If a charity breaks any of these rules, it is a red
- They are not allowed to call before 8 a.m. or after 9 p.m.
- They must give you the name of the charity and disclose that the purpose of the call is to seek a donation.
- They also must truthfully tell you:
- Their organization’s connection to the charity.
- The mission of the charity.
- If the donation is tax-deductible.
- How much of the donation will go to the charity’s programs.
- The charity’s affiliation with the government.
- Robocalls or prerecorded messages cannot be used to reach you unless you have supported the charity in the past.
- The name of the charity or fundraiser must be shown on your caller ID, along with a number that can be called back to request to be placed on the charity’s do not call list.
You do not have to give over the phone. Being pressured to do so is a good indication that the call is from a scammer. Take the time to do some research. Here are some more tips for fielding telephone requests for contributions:
- Do not ever give out personal information such as your social security number, date of birth, or bank account information. Con artists use this information to steal your identity.
- Be aware that fake charities use organizational names that closely resemble legitimate charities.
- Ask for the organization’s EIN. If they don’t have one, don’t donate. Once you have an EIN, you can look up the organization on the research links provided above.
- Ask about the organization’s mission, goals, and history of success. Vague or missing answers can be an indicator that the call is from a scammer.
- Today’s technology makes it easy for scammers to fake the information on your caller ID. Ask the caller for the charity’s exact name, web address, and mailing address; this will allow you to confirm it later.
- Never donate from a text request without confirming the number through the legitimate charity’s website.
- Ask how much of your donation actually goes into the charity’s programs. Doublecheck this information by calling the organization directly or by going to the charity’s website to find out if the information the caller gave you and the information you get from the charity match up.
- Ask about the tax-deductible status of your donation. You can verify whether or not your donation is tax-deductible by looking up the organization in the IRS’s Tax Exempt Organization Search.
- Con artists will make every promise and say anything they think you want to hear to get you to give them money. They may claim your donation is already pledged or that you gave last year. This tactic is used to lower your resistance. They may even send you something in the mail that says you already pledged. Don’t be pressured into paying what could be a scammer.
- Look for vague and sentimental claims that lack specific information about how your donation will be used.
- Imposter organizations often say your donation is tax-deductible when it is not. Always research and confirm before donating.
- Some scams involve guaranteeing you winnings in a sweepstake in exchange for a donation. This is illegal.
- Report scams to gov/complaint.
Social Media or Crowdfunding Requests
Crowdfunding sites have very little control over who utilizes their sites. Hyperlinks are easily faked. You should also be aware that donations to individuals are not tax-deductible. We do not recommend making donations through these types of sites. The safest way to donate is by giving through a legitimate charity’s website.
Never click on links in unsolicited email, Facebook or Twitter fundraising messages; this can unleash malware that will steal your identity or infect your computer with a virus.
Ready to Donate?
Never pay by using gift cards, wire transfers or cash. This is almost always a scam. The safest way to pay for a donation is by check or credit card after you have researched the charity.
After Your Donation
- Watch your bank account and credit card statements. Make sure the amount you’re charged matches the amount you agreed to donate.
- Make sure there are no reoccurring payments if you did not agree to this.
- Keep a record of all your donations.
Charity scams are very upsetting and prevalent. Watch for red flags and prepare yourself to ask tough questions to protect yourself from these imposters. Take the time to do some research before you open your wallet. There are many worthwhile organizations who will use your donation wisely.
If you have been the victim of a fraudulent charity scheme, contact the attorneys at the Wetherington Law Firm for a free case evaluation. We understand the frustration you feel at having been taken advantage of and are here to help.
Download the Wetherington Law Firm’s Checklist on Charitable Giving.
AARP’s Fraud Watch Network can help you spot and avoid scams. Sign up for free “watchdog alerts,” review their scam-tracking map, or call their toll-free fraud helpline if you or a loved one suspect you’ve been a victim.
- Video: Be Sure Your Giving Counts
- 7 Ways to Spot Fake Charities After a Disaster
- How to Make Sure a Veterans Charity Is Not a Scam
- The Charity Check Scam