During the holidays, people, including business owners, are more likely to contribute to charities. Unfortunately, scam artists are ready and waiting to take advantage of your generosity. Here’s what you need to know to avoid having your contribution go to a not-so-worthy cause.
Tis the season to be charitable.
Many small business people continue to contribute generously to charitable causes, particularly during the holiday season.
Criminals are well aware of this. At this time of year, scammers are as busy as Santa’s elves, working the phones and computers, calling and e-mailing businesses to solicit charitable contributions for nonexistent charities.
Back in May, the Federal Trade Commission (FTC) announced the kick-off of “Operation False Charity.” The operation is a nationwide, 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.
“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.”
Below are some tips from the FTC on how to avoid being taken in a charity scam:
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.