Ways to identify and avoid charity scams

Giving to charity can be rewarding for those looking to support causes close to their heart. But charity scams are on the rise¹ as fraudsters set out to deceive individuals looking to donate.

The clever techniques that fraudsters use may make it hard to detect a charity scam. But there are some ways individuals can be more vigilant to potentially avoid being scammed. This guide will take a look at potential tactics charity scams may use, ways to identify them, and steps to take for verifying charities and making safe donations.

What are charity scams and how do they work?

Charity scams are fraudulent schemes that aim to deceive individuals into donating money or assets to a fake or illegitimate charitable organization. The tactics fraudsters use may make them seem legitimate, which may make detecting scams difficult.

Capitalizing on people's goodwill, fraudsters set themselves up as what looks like a legitimate charity to trick people into making donations. Different types of charity scams may include:

• Fake websites or social media channels that mimic a legitimate charity and ask for donations.
• Phishing emails that seemingly come from a reputable charity and ask for donations.
• Unsolicited phone calls pretending to be from a charity and requesting personal information or donations in an urgent manner.

Although there are many scams to look out for, the intention of the fraudsters is generally the same. They seek to trick donors into sending them money, either by check, a wire transfer, or by taking bank account information.

In some cases, the scam could be about more than just getting the donation money, potentially aiming to gather personal information that could be sold as part of an identity theft scam.

Potential warning signs of charity scams

As charity scams become more prevalent, it’s essential that individuals remain vigilant to prevent fraud. While it may be hard to detect charity fraud, especially if the scams look or sound legitimate, there are some key warning signs of scams to look for. These could include:

• Aggressive tactics: While possible, it’s unlikely that a legitimate charity will use aggressive tactics when asking for donations. If a person is using high-pressure tactics such as emotional manipulation or creating a sense of high urgency to get individuals to donate money, this could be a red flag. If individuals feel they are being pressured, they should try to stay calm and decline to share any information or make a donation. It’s important to take time to research the charity and verify they are who they say they are.
• Lack of transparency: Legitimate charities are often transparent about how they receive donations, how donations are used, and their activities. Scammers are less transparent and often give vague information. They may even refuse to give more information at all.
• Inconsistencies in communication: The way scammers contact individuals may be constantly changing, with phone contact one day and email the next, followed again by phone. Sometimes the language they use may alter. A potential sign of a scam is poorly written emails or text messages. Check for spelling mistakes or unprofessional language.
• Common scam periods: Common scam periods are often around the holidays or a natural or national disaster, as scammers take the opportunity to take advantage of people’s desire to help and play on their emotions.
• No tax deductibility: Legitimate charities are often eligible for tax deductions, but fake charities won't have this status. Scammers may falsely claim that donations are tax-deductible. Check if a charity is tax-exempt with the Tax Exempt Organization Search tool from the IRS.

How to verify a charity

A good way to help potentially avoid charity scams is to verify the legitimacy of organizations before donating. Legitimate charities are typically federally registered organizations, which makes them generally easy to verify.

Individuals can follow these steps to help verify a charity:

1. Visit BBB Wise Giving Alliance.
2. Enter the charity name and click search.
3. Find the charity in the list of search results.
4. Those that are a BBB accredited charity will show their accreditation.

Following these steps can help people be vigilant and potentially better protect themselves against charity scams. However, individuals should always remember if something feels wrong, they should trust their gut instincts. If the warning signs are there, individuals should hold off donating until they are sure that the charity is genuine.

How to report suspected scams

If a scam is suspected, it’s crucial to report it. While some may have been able to spot the warning signs, others may not. Report charity scams as quickly as possible to help raise awareness and potentially stop fraudsters from being able to scam more people.

Individuals can report a fake charity and charity fraud through the Federal Trade Commission and state charity regulators. To report charity scams or contact the Federal Trade Commission. Those donating via PayPal that suspect a charity scam can report fraud in their PayPal account.