3 Steps to Beat the Charity Scammers

How charity scams, old and new, rake in millions: Internet Scambusters #922

Charity scammers have raked in hundreds of millions of dollars over the years — and they’re still doing it.

In this week’s issue, we reveal the big-time alleged scammers of the past and the latest attempts to cash in on current topical situations.

We’ll also tell you the top three actions you can take to sidestep the scammers and where to get more information.

Let’s get started…

3 Steps to Beat the Charity Scammers

Long before we had the Internet, we had charity scammers — crooks who hid their mischief behind the name of a charity, genuine or fake.

But with the advent of the Internet, scammers have redoubled their efforts to pass themselves off as legitimate. Every time there’s a catastrophe of some sort, hundreds of websites are set up with the aim of fleecing would-be donors.

But that’s only the tip of the iceberg. Some phony fundraisers are busy year-round, often using the names of genuine charities to convince people that they’re legit.

That’s not all. As we’ve previously reported, even the performance of some real charities could be classified as dubious because so little of the money they raise finds its way into the hands of the needy. Most of the money goes to high salaries or administration costs.

Things have become so bad that one of the non-profit “watchdogs” that review the activities of these fundraisers, CharityWatch, published a list of scam or dubious charities in what it calls a Hall of Shame, naming the individuals it alleges are behind some of the scandals.

With its latest update, published a few weeks ago, the organization declares: “The most important lesson to be learned from the … colorful stories of charity scoundrels is that regardless of how distinguished, well-connected and honored a charity leader is, he is only human and may be tempted to use the power and influence of his position to abuse the public’s trust and thusly become the next member of the CharityWatch Hall of Shame…”

Setting aside the suggestion in that statement that all the supposed offenders are male, which, actually, most of them are, the organization lists the activities of more than a dozen people it claims qualify for membership in this Hall of Shame.

Recent Additions

Most of these people are alleged to have perpetrated their crimes some years ago. The more recent additions include:

  • An entrepreneur, now retired, said to have founded 30 different health-related charities that he used “to enrich himself and his friends while spending too little on funding the causes he touts.”
  • An alleged scammer who took over a stolen identity and used a sham veterans charity for money laundering and theft. According to CharityWatch, he fleeced his victims out of $100 million in just five years. He went on the run but was eventually captured, with a suitcase full of cash.
  • A published author alleged to have blurred the distinction between an institute relating to Asian affairs and his own personal business interests. The charity was said to have funded various elements relating to his books, while it gained nothing from his speaking engagements.

There are more, of course, and you can read the full Hall of Shame list.

But even this list is just the tip of an iceberg among charity scams. As proof, the IRS has identified fake charities, claiming to be tax exempt (and therefore genuine), among the biggest sources of fraud it has encountered this year.

For example, the agency came across an individual who has allegedly tried to dupe donors with a name very similar to the ongoing Black Lives Matter campaign.

3 Key Steps

What can you do to avoid the charity scammers? Here are three important steps:

  1. Never donate to a charity you’ve never heard of, no matter how reasonable its name, without checking them out. Scammers are sending out emails and using robocalls to try to trick victims. Even if the name sounds about right, you must still check them out. So…
  2. Check out any organization you’re planning to donate to by visiting watchdog sites. CharityWatch.org and CharityNavigator.org are among the main check sites. Search on “charity check” for more. The IRS also maintains a searchable database of genuinely tax exempt charities.
  3. Be especially wary of any organization claiming to be raising funds for a current situation, such as the Covid pandemic or a recent natural disaster like hurricane damage or earthquakes.

The US Federal Trade Commission (FTC) publishes its own list of actions to beat the charity scammers at How to Donate Wisely and Avoid Charity Scams.

Alert of the Week

A well-tried scam involving unclaimed property has reared its head again.

Potential victims receive an email or text message saying they’re entitled to claim funds held in their name by their state. To get the cash, they might be asked either to pay a fee or provide information that can be used for identity theft.

Don’t yield to this come-on. Those who look after unclaimed property don’t ask for confidential information (though they may request proof of identity) and they certainly don’t request an upfront payment.

If you think you might be entitled to either money or personal property, your state probably has a list of items. Your starting point should be the National Association of Unclaimed Property Administrators. The site is searchable — and it’s free!

That’s it for today — we hope you enjoy your week!