Charity Scam: Tis the Season to be Charitable, But Don’t Fall for Charity Scams

Despite the poor economy, many small business people continue to contribute generously to charitable causes, particularly during the holiday season.

Crooks are well aware of this, which is why they are attempting to cheat, steal and rob from the business community. At this time of year, the crooks are as busy as Santa’s elves, working the phones and computers, calling and e-mailing businesses to solicit charitable contributions for nonexistent charities.

Some of the bogus charities claim to provide gifts and services to the troops overseas, children and seniors in hospitals, the homeless and others less fortunate.

Back in May, the Federal Trade Commission (FTC) announced the kick-off of “Operation False Charity.” The operation is a nation-wide, federal-state crackdown on fraudulent telemarketers claiming to help police, firefighter and veterans.

The FTC, along with federal and state law enforcement agencies across the country, took 76 law enforcement actions against 32 fundraising companies, 22 non-profits or purported non-profits on whose behalf funds were solicited, and 31 individuals. These include two FTC actions against alleged sham non-profits and the telemarketers who made deceptive claims about these so-called charities.

“In these difficult economic times, Americans want to make every contribution count,” said FTC Chairman Jon Leibowitz at the launch of the operation. “The good news is they’re still being generous and donating to charitable organizations, including those that support our police officers, firefighters, military families, and veterans. The bad news is that some unscrupulous operators have seized on this goodwill to make a quick buck. The actions we’re announcing today demonstrate that federal and state partners will find charity scammers and we will stop them.”

“All of us share a deep trust and respect for our law enforcement officers, firefighters, and military service members,” said Attorney General Chris Koster of Missouri. “The attorneys general across the country will not stand idly by while greedy telemarketers take advantage of that trust and respect.”

“I encourage all donors to maximize their charitable contributions by getting basic financial information about an organization before giving,” said Pennsylvania Secretary of State Pedro A. Cortés. “Trustworthy resources are available through your department of state or attorney general’s office. By doing research and asking questions of a charity or its professional fundraisers, consumers can help ensure their donations have the impact they expect.”

Although the FTC and law enforcement agencies continue the crackdown, the charity scam artists are tugging at your heart strings and patriotic sentiment during the holiday season.

Below are some tips from the FTC on how to avoid being taken in a charity scam:

Recognize that the words “veterans” or “military families” in an organization’s name don’t necessarily mean that veterans or the families of active-duty personnel will benefit from your donation.
Check out an organization before donating. Some phony charities use names, seals, and logos that look or sound like those of respected, legitimate organizations.
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, 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. 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 a sweepstakes.
The business person who gives money to a bogus charity is not the only victim. The people for whom your charitable contributions were intended are also victimized.

Paul Davis is a writer who covers crime & security for newspapers, magazines and the Internet. He can be reached at pauldavisoncrime@aol.com