Educate Consumers on Dangers of Charity #Scams

Scammers will consistently discover new methods to swindle consumers. Unfortunately, that now includes tricking well-intentioned people into donating money to fraudulent charities or misdirecting donated funds into scammers’ pockets. Community FIs can help curb these problems by educating consumers on the very real dangers of charity scams and how to recognize the warning signs.

According to the most recent statistics from the National Philanthropic Trust, Americans donated $358.38 billion in 2014, across an estimated 1.5 million U.S. charitable organizations. These numbers indicate charitable giving in this country is at its highest in recent history.

As more Americans are reaching into their hearts and pocketbooks, more criminals are preying on this growing spirit of giving by taking donations for themselves.

The past few years haves seen a rise in organizations describing themselves as “charitable.” However, many of these are sham organizations aimed at misleading donors.

Below are a few preventative measures community financial institutions (FIs) can share with consumers to help ensure donations are placed in the hands of legitimate charities:

  • Do some homework — Encourage consumers to research the organizations to which they are considering donating. The Better Business Bureau and Attorney General’s Office offer lists of reputable charitable organizations. Consumers can also use the IRS’ Exempt Organizations Select Check tool to determine if they are donating to a qualified charity entitling them to a tax deduction.
  • Check rankings — Direct consumers to online tools, such as Charity Watch,Charity Navigator or Guide Star, for additional insight into how a specific charity is ranked and how donations are used.
  • Authenticate websites — Advise consumers to check the validity of a charity’s website prior to making an online donation. Often, fraudsters will make a site look like an established charitable site to trick potential victims. Also, encourage cardholders to check the website’s URL to make sure it begins with https:// and has an image of a padlock. This indicates it is a secure site for entering card and personal information.
  • Don’t overshare — Remind consumers a legitimate charity will never ask for their social security numbers, driver’s license numbers or financial account information.