The holiday season is a time for giving, but unfortunately, it’s also a time you might encounter a charity scam. By learning how to avoid these scams, you can help to ensure that the money you donate goes to those who really need it, as well as protect yourself from fraudulent credit charges and even identity theft.
Avoid Impulse Donations
It’s always best to contact a charity yourself, rather than donating when they contact you. Telephone calls, door-to-door solicitations and emails are all popular methods for charity scammers. When someone contacts you, there are two things that you need to determine: if the charity is real and if the person contacting you actually represents that charity. Be especially careful with vague charities like those that claim to be helping local police, firefighters or missing children. Instead of reaching for your wallet, take their information, research the charity and contact them directly if you wish to donate.
Watch for Red Flags
The peak time for charity scammers is the holiday season and times of natural disaster. While you shouldn’t be discouraged from donating, there are some common tricks to keep an eye out for. Avoid any charities that: won’t provide details on its mission, costs, and how your donation will be used; use a name that sounds like another well-known nonprofit, don’t provide receipts for tax deduction, ask for cash donations or offer some kind of prize or sweepstakes for your donation.
Keep a Heads-Up on Overhead
Not all charities have the same priorities. Websites like Charity Navigator, Charity Watch and the BBB Wise Giving Alliance can tell you more about a given charity’s track record and how much of your donation will be going to the intended purposes, rather than paying for employee salaries, offices and other overhead. Before giving, be sure to research the charity you are interested in to help ensure you are truly supporting its cause.
Be Careful of Crowdfunding
Online crowdfunding campaigns are an increasingly popular way for legitimate causes to get the funds they need. However, the lure of widespread attention through social media also makes this a prime platform for fraudsters. If you read about a story online that touches your heart, check the source before getting out your credit card. Services like CrowdsUnite.com can help you determine if the website hosting the campaign is legitimate or not.
What to Do if You’ve Been Scammed
No one is necessarily immune to a sincere-sounding con artist or a misguided volunteer who believes he/she is working for a legitimate charity. If you discover that you have been the victim of charity fraud, report it to the police immediately. Contact your financial institution to report the fraud and stop the payment if you still have time to do so. If you suspect that the information you gave could be used for identity theft, get a free copy of your credit report (you’re entitled to one per year) and review it for suspicious activity. You can also lock down your credit report with TU Credit Lock to help prevent fraudsters from applying for more credit using your name.