What Are Fake Charity Scams and How Do They Work?
Not all organizations soliciting charitable donations are actual charitable organizations.
Some, in fact, are fraudulent organizations pushed by scammers in an effort to convince you to give them your hard-earned money.
Just as it sounds, in a fake charity scam, an individual impersonates an actual charity to request donations.
Perpetrators of these types of scams try to take advantage of your generosity and desire to help others less fortunate than you and people in urgent need.
Fake charity scams harm more than just their targets who give them money. They also harm real charities from which they’re diverting sorely-needed funds.
Types of Fake Charity Scams
Some fake charity scammers pose as actual, familiar charities like UNICEF or The Red Cross, while others invent their own fake charity name.
Fake charities may try to contact you by:
- Text
- Phone
- In person via door-to-door contact
- Street solicitation.
A variant of the fake charity scam involves an individual seeking donations for him or herself or a close friend or family member in need of urgent medical treatment or other immediate aid.
To further manipulate your emotions, some scammers even purport to be seeking aid for sick children.
Red Flags to Look Out For
Fake charity scams are particularly prevalent immediately after major tragedies or natural disasters.
If you get contacted by an alleged charity after such an event, take the appropriate precautions listed in the Tips section below before donating them any money.
If you’ve never heard of the charity allegedly soliciting funds from you, be suspicious of their legitimacy.
But even if you have heard of the charity in question, don’t automatically assume the caller is a legitimate representative of that community; instead, follow the tips in the next section below.
Other red flags of potential fake charity scams include if the person contacting you is:
- Unable to provide identification, such as in the case of a street solicitor
- Applying hard-pressure sales tactics or trying to make you feel selfish or guilty if you don’t donate
- Insisting on only cash donations, as the charity doesn’t accept checks, or, if the person will take a check, he or she asks you to make it out to them personally rather than the charity itself
Tips on How to Protect Your Information and Your Money
If the Charity Name Is Unfamiliar to You
If the charity purportedly seeking a donation from you is unfamiliar to you, don’t just click a link in an email or visit a website or call a phone number listed there or provided to you by a cold caller on the phone.
Instead, Google the name yourself and see what comes up; do any of the results have a .ORG domain?
Note: While a .ORG domain is not an absolute sign of legitimacy, the lack of one is a reasonable sign of illegitimacy.
Additionally, do any of the results include articles published by respected authorities like NPR or The New York Timesregarding the alleged organization?
Finally, and most significantly, look up the organization on the IRS Tax Exempt Organization Search web page.
Only organizations with tax exempt status, such as a 501c3 organization, can legally solicit tax-deductible charitable donations.
If the Charity Name Is Familiar to You
The solution here is simple. If you recognize the name of the charity allegedly seeking funds from you, and you wish to donate to them, don’t click a link in an email and don’t give your payment information to a caller on the phone.
Instead, simply look up their official email address or phone number on your own and contact them directly to make your donation.
General Tips
Whether or not the charity is familiar to you, here are a few tips to further help protect your information and your money.
Ask for Printed Information
Whether you’re approached in person on the street or called at home on the phone, request a business card or a brochure.
This is a quick and easy way to weed out many (though not all) scammers, as many will not even be able to produce that minimal evidence of authority.
If, on the other hand, the person is able to provide you with a business card and/or brochure, thank the person politely and research the contact information provided on that printed material independently.
Get a Receipt
In all situations and circumstances, anytime you make a charitable donation, make sure to get a receipt.
Examine that receipt closely, too, to make sure it contains the charity’s information on it.
If anything about the receipt seems suspicious to you, report the incident immediately as described in the next section below.
If the alleged charity in question indeed turns out to be a scam, you may or may not be able to retrieve any monies you handed over, but you will be able to help prevent other innocent, kind-hearted people like you from becoming victims of the same scammer.
Taboo Payment Methods
Never make a charitable donation using any of the following payment methods, and if anyone asks you to do so, sever that communication instantly:
- Wire transfer
- Money order
- Prepaid or pre-loaded card
- International funds transfer
- Courier or overnight delivery
- Bitcoin or other cybercurrency
Summary & Specific Resources
Fake charity take advantage of the generosity of kind-hearted people and give real charities a bad name.
To protect your information and your money and make sure real charities continue getting the support they need for their missions to thrive, anytime you wish to donate money to a charity, take the initiative to contact that charity directly on your own.
While many alleged representatives of charitable organizations may be perfectly legitimate, it’s always better to be safe than sorry.
If you’re concerned that you may have been the victim or attempted victim of a fake charity scam, contact the FBI (Federal Bureau of Investigation) and the FTC (Federal Trade Commission) to report the incident.
