Category Archives: Fraud

Charity Fraud

How to donate wisely and avoid charity scams

2018 Newsletters, Fraud

When it comes to security, few people are more appreciated in the community than law enforcement personnel. We all recognize that police officer, firefighter, and military personnel face dangerous circumstances every day while trying to protect us. Some have even given their lives for us. That’s why we are often easily convinced to donate to a charity claiming to support these deserving public servants.

In fact, two or three times a year, your phone might ring, and the person on the other end of the line might thank you for your support and asks you to donate to a “nonprofit” fund that provides some financial assistance to one or more of the groups mentioned above. Even when economic times are difficult, many generous Americans are still willing to donate to one of these charities.

Unfortunately, some dishonest people take advantage of this generosity and turn it into a way to make some fast money. This often takes the form of telemarketing by people using legitimate-sounding charity names and describing sympathetic causes to give their scam organizations a feeling of credibility.

For example, the caller may claim that your donation will support disabled veterans, often right in your community, or that your donation will assist military families in need. These charity scams may mislead you about the amount of money that goes to the cause, or the cause may never see a single cent.  Their goal is to convince you to contribute money that doesn’t go to a charity at all but is used by the scammers to support themselves and their fundraisers.

To try and prevent honest citizens like you from being taken advantage of the Federal Trade Commission (FTC) along with the National Association of State Charity Officials (NASCO) has initiated “Operation Donate with Honor” to crack down on the fraudulent charities who make these false claims. The FTC encourages all consumers to get basic financial information about an organization before donating money. By doing a little research and asking some basic questions of the caller, you can help ensure your donations have the impact you intended.

FTC Tips for donating wisely

Here are some tips provided by the FTC to help you make sure the donations you make really are going to the purpose you intended.

  • Recognize that the words “veterans,” “military families,” “police,” “firefighters,” or “sheriffs” in an organization’s name don’t necessarily mean that veterans or the families of any of these groups will benefit from your donation. Watch out for names that only look like well-known charities.
  • Check out an organization before donating. Some phony charities use names, seals, and logos that look or sound like those of respected, legitimate organizations. Search the charities name online and with the groups listed at the end of this article.
  • Donate to charities with a track record and a history. Charities that spring up overnight may disappear just as quickly.
  • If you have any doubt about whether you’ve made a pledge or a contribution the caller claims you’ve made in the past, check your records. If you don’t remember making the donation or pledge, resist the pressure to give.
  • Call the office in your state that regulates charitable organizations to see whether the charity or fundraising organization has to be registered.
  • Do not send or give cash donations. Never pay by gift card or wire transfer. For security and tax record purposes, it’s best to pay with a check made payable to the charity.
  • Ask for a receipt showing the amount of your contribution.
  • Be wary of promises of guaranteed sweepstakes winnings in exchange for a contribution. You never have to give a donation to be eligible to win sweepstakes.

Examples of Charity Scams

The following are past examples of charity scams to watch out for.

American Veterans Relief Foundation, Inc. (AVRF): The Federal Trade Commission contends that solicitors calling on behalf of AVRF falsely claimed that the money they were raising would support the families of soldiers fighting overseas through a program it called “Operation Home Front.” The truth is, AVRF spent virtually no money assisting military families. It is important to recognize that “Operation Home Front” has no connection to the genuine nonprofit known as “Operation Homefront, Inc.,” which is a national organization with 30 chapters across the country that provides real support to the families of troops and gets high ratings from watchdog groups. Because the two names would sound the same over the telephone, people were easily convinced to donate to the scam callers.

Coalition of Police and Sheriffs, Inc. (COPS): The Federal Trade Commission alleges that COPS misrepresented its affiliation with police officers and sheriffs and charged the defendants with assisting others to commit deceptive acts and practices.

Disabled Firefighters Fund (DFF): Similarly, this scam claimed that the donated funds would go to helping disabled firefighters, which of course they didn’t.

All three of the above charity scams were based at the same address in Santa Ana, California, and were created almost entirely to provide profits for the individuals running the scams and the fundraisers they hired.

Jedi Investments, LLC; Impact Fundraising, LLC; Millenium Fundraising, LLC; and PC Marl, Inc.: These organizations were “owned” by one man and solicited money on behalf of the sham police, fire, and veterans’ nonprofit charitable organizations.

Callers misrepresented the programs for which funds were solicited, misrepresented that donations would benefit the donor’s local community, mailed notices to consumers stating they had made a pledge when they had not even been called and misrepresented their affiliation with sheriffs and police. The companies often targeted seniors, sometimes debiting their accounts for donations without permission.

Quick-check Warning Signs of a Charity Scam

  • High-pressure pitches
  • A “thank you” for a pledge you don’t remember making.
  • Requests that donations be made in cash.
  • Charities that offer to send a courier or overnight delivery service to collect your money.
  • Charities that guarantee sweepstakes winnings in exchange for a contribution.
  • Charities that spring up quickly, especially after events like natural disasters.

Make sure your money gets to the people you want to help

As pictures of devastated areas from the newest national or world disaster start to hit our local media outlets, it usually doesn’t take long before aid organizations begin their plea for donations. Some of these organizations have been in place for years. Others are created, sometimes haphazardly, to provide for a specific area or need. Still, others are opportunist groups who gear up to take full advantage of the tragedy—and your open wallet. How do you make sure that your donation is going to make the most significant impact? Below are some ideas that will help you.

Make sure you donate to charities that have been around for a while and that have demonstrated their credibility through multiple responses and situations. Look for strong leadership, and money management skills in addition to strong local organization, crisis training, and resources.

Credible organizations usually have extensive coverage with staff or trained volunteers on the ground in the areas that need support and have websites and phone numbers where you can research their operation and areas of focus as well as make direct donations.

Be wary of groups which claim that 100% of donations will assist victims. Despite what an organization might claim, charities have fundraising and administrative costs, and some of your contributions will go to fund their operations. Most of the legitimate organizations will list how much of your donation will go to their overhead costs and how much will go toward victims.

Be especially wary of any organization that represents themselves as surviving victims or “officials” soliciting donations via e-mail or social networking sites.

You should also be cautious of any e-mails that claim to show pictures of the disaster areas in attached files because the files could contain viruses, even if those emails come from known senders.

Watch out for phone solicitation scams that will try to get your credit card numbers and other identifying information while promising money will go directly to help victims.

One of the most straightforward trends in giving is through the use of a text. You just use your cell phone to send a text to an advertised number. The donation amount of $5 or $10 is added to your phone bill for secure payment.

Although this method of donating can be secure as most major phone companies regulate who they will work with. It is still a good idea to find out all you can about the organization asking for the donation before you hit the “send” button.

We understand that this list may seem long and daunting, but don’t let it discourage you. Below you will find a list of credible groups that have already done the heavy lifting for you! With the resources below, it’s easy to look up a charity’s report and ratings and ensure that you are donating wisely.

Helpful Websites

The following websites are available to help you check out a charity.