The end of the year is approaching, and with that comes nonprofits and charities asking for donations by way of fundraising drives or campaigns advertised through email, phone, text, snail mail or social media.
Sadly, scammers are well aware of this, and try to lure big-hearted folks who want to open their pocketbooks to give to a fake charity. These online scams are in great abundance during this time of year.
As you might be inspired during the holiday season to be generous and donate to important causes and organizations doing good work, you'll want to be careful, lest you get tricked into giving your money to con artists.
We'll shine a line on some common donation scams, tell-tale signs of charity fraud, how to protect yourself from being conned, and how to donate wisely, from myFICO:
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Be on the lookout for donation scams
Donation scams are usually sprung around a recent event that's making headlines and tugging at people's heartstrings, or during times of year where donating is front and center, explains Tim Helming, a cybersecurity evangelist with internet intelligence specialists DomainTools.
"Opportunists almost always show up to build scams to capitalize on current events, including holiday and post-disaster giving," says Helming. For instance, a scammer might pretend to be a children's charity, or a non-profit organizing a food and gift drive during the holidays.
"A lot of these scams will involve phishing, and one of the key ways to avoid getting caught by a phishing attack is to be aware of look-alike domains and websites. Threat actors are good at creating domain names that can fool a lot of users by looking very similar to legitimate websites."
Know the red flags
Donation scammers tend to pull from the same bag of tricks to get you to quickly make a donation—only to later realize you've been conned. According to the Federal Trade Commission (FTC), here are some common tactics fraudsters use:
- Say they're from an organization that sounds like but isn’t the precise name of a legit charity
- Falsely claim that your donation is tax-deductible
- Plead urgency so that you feel pressed to make a donation right away
- Make vague claims but don't offer specific information on exactly where you donation will be used
- Making grand guarantees, such as you'll win in a sweepstakes if you make a donation.
Check if a charity is legit
The good news is that there are plenty ways to check if a charity is a legitimate one:
1. Research the organization on trusted websites.
Before you give to a charity that is soliciting donations, confirm the entity's worthiness with sites such as the Better Business Bureau (BBB) or Charity Navigator, recommends Joseph Steinberg, a cybersecurity and artificial intelligence expert. Other sites that gives ratings and reviews on charitable organizations include:
Want to check whether a donation is tax-deductible? You can do a search on the IRS's Tax Exempt Organization Search.
2. Check the website carefully. Look carefully for misspellings in the domain name in the URL, suggests Helming. Also, open a fresh browser tab and type the organization's basic domain into the browser address bar. In other words, don't paste the link from the original source.
If a website is riddled with typos and grammatical errors, that's another tell-tale sign that the charity isn't a legitimate one.
3. Do some cross-checking. Do a stand-alone web search for the organization's website and also do a search using the organization's name plus words such as "scam" "review" or "rating."
4. Be wary of unsolicited requests. If you received an ad on social media, an email, or a text message, it may set off alarm bells and flashing red lights—unless you specifically opted into text messages about that organization, points out Helming. "If you can’t recall whether you opted in, there’s a good chance that you didn’t," he says. "Vetting the source of the proposed donation site can help save you from logging into a fake site."
5. Donate wisely. To avoid falling victim to a donation scam, here's how you can donate in a safe and wise manner:
- Pay by credit card. Whenever possible, make contributions using a credit card rather than a debit card, gift card, cryptocurrency, check, or cash, recommends Steinberg. "If you find out that a contribution was made under false pretenses, you can dispute the relevant charge [with a credit card]," says Steinberg. "Using one-time credit card numbers is even better, both to prevent fraud and to help authorities catch criminals."
- Request detailed information. Research the alleged charity or cause online and ask for specifics, including the organization's address and phone number, recommends Chris Hauk, a consumer privacy champion at Pixel Privacy. "Ask the charity how much of your donation actually goes to the cause and how much goes to 'administration' or 'overhead,' " says Hauk. "Ask your state's charity regulator for information about the charity or cause."
Bottom line
Should you find yourself a victim of a donation scam, report it at ReportFraud.ftc.gov. This will help the FTC investigate and protect others.
Donation scams are a concerning matter, no doubt. But by practicing vigilance, looking out for red flags, and doing your due diligence, you can avoid them this holiday season.
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