09/17/2020

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Protecting Yourself From Charity Scams This Holiday Season



Giving back during the holiday season can feel really great. When you donate a portion of your hard-earned money to charitable causes such as homelessness, wildlife preservation, hunger relief, or many others, you could potentially make a positive impact on someone’s life or even the world as a whole.

In theory, the internet makes it extremely easy to donate to these causes. However, there are many organizations and individuals who prey on others’ generosity via false and/or unsecure websites.

These swindlers aim to con people into handing over funds to fake charities for personal gain. If you fall for one of these donation scams, you could run the risk of not only losing your money but also compromising your personal information.

There are many honest and reputable charities out there doing great work, but how can you tell the difference between the real and the fake? The following seven guidelines could help you identify and avoid charity scams this holiday so you can better protect your money while still giving back.

Doing Your Research


If you have decided to set aside a sum of money to be used as a charitable gift, one of the most important things you could do is to spend time researching the organization that you’d like to contribute to.

The Federal Trade Commission (FTC) suggests using certain watchdog organizations, such as the BBB Wise Giving Alliance and Charity Navigator when completing your research. These websites provide detailed reports about your chosen charity’s financial history, fundraising tactics, and board members.

Another way you could determine if an organization you’d like to give money to is legitimate or not is to check with your state’s charity regulator . Requirements vary by state, but many states require charities to register with their respective state charity regulator before they can lawfully collect donated funds.

The FTC also recommends searching the name of the charity organization along with crucial search words like “scam,” “review,” and “complaints” in a common search engine such as Google.

If an organization has poor reviews from watchdog organizations such as the BBB Wise Giving Alliance and Charity Navigator , is not registered with your state charity regulator, and has many negative online complaints from people who have been ripped-off, it is likely a scam.

Never Paying by Cash, Gift Card, or Wire Transfer


One tactic that charity scams may employ is requesting money via unusual and hard-to-trace payment methods. If an organization or individual asks for your donation in the form of gift cards, cash, or wire transfer, this could be a scam.

Contributions in the form of cash, gift cards, and wire-transfer can be harder to trace, and thus tend to be even harder to make a case for reimbursement once you’ve detected fraud.

According to the FTC , using a credit card or check for any altruistic donations is the way to go, as is keeping your own records of any charitable donations that you may make.

Donating Smaller Amounts of Money


Instead of offering up your generous contributions to a charity of your choice in one fell swoop, you could consider choosing a smaller amount of money to donate on a consistent basis via a recurring payment.

Doing this can not only build a lasting and long-term relationship with a charity of your choice, it can also be one more step to ensure that you are protecting yourself against bogus charities.

If the organization does not allow you to give gifts in smaller amounts of money and instead tries to pressure you into a one-time, lump-sum payment, this could be a red flag.

Protecting Personal Information


Like many monetary transactions completed over the internet, it is typical to provide your home address and ZIP code, along with your first and last name, with a credit card purchase.

However, confidential personal information such as your Social Security number, date of birth, or bank account number is likely not necessary data when making a payment online. Be wary of scammers who may try to trick you into giving away this highly valuable and sensitive information.

Additionally, checking to make sure that a website is secure before you make a payment could be a good way to avoid being scammed. Many internet browsers have built-in mechanisms that alert you when a payment page is not secure and therefore easy to compromise by would-be charity scammers.

Being Knowledgeable About Common Scamming Tricks


Those engaged in fraudulent charity scams have developed tactics to confuse and deceive individuals into donating their hard-earned money.

Bogus organizations or individuals will use vague language that fails to provide specifics about how donated funds will be used. They may also utilize call spoofing technology that changes their Caller ID to make a call appear like it’s coming from your local area, thereby potentially and falsely legitimizing it in your eyes.

Other tricks that fake charities may use include insisting that you have previously donated to their “organization” in the past, falsely claiming that contributions to their illegitimate charity are tax-deductible, and guaranteeing sweepstakes winnings in exchange for a monetary contribution. To find out how donations can impact your tax situation, we recommend that you seek a qualified tax professional.

Learning how to identify these commonly used tricks could be the first step to combating charity cons.

Being Wary of Responding to Email Solicitations


Sometimes, reputable charity organizations will share first-person narratives, testimonials, or personal stories to motivate potential donors to contribute.

These accounts can come in the form of an email with the organization’s verified logos and/or insignia, and sometimes including the official signature of the charity’s president or a celebrity endorsement.

“A cause” scam, however, might simply send unsolicited emails to individuals with generalized pleas for money or vague accounts of victimization meant to appeal for cash. If you are the recipient of one of these emails, it could be a good idea to do your due diligence before responding.

Listening to Your Instincts


If anything about a potential organization feels “off,” it could be the best thing to simply find another easily-verified charity to donate to instead. After all, there are many legitimate organizations out there attempting to do good work in the world that could benefit from your generosity and support.

Using Your Money Differently


Giving back during the holidays can feel great and bring so much joy, and nobody wants to lose money to donation scams. Consider a SoFi Money® cash management account—once your money arrives in one of our partner banks, it is FDIC-insured up to $1.5 million.

Learn more about SoFi Money®.

Learn More


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