Beware of Holiday Fraud

In 2021, the generosity of Americans was highlighted by the Giving USA Foundation's annual report, showing a remarkable $485 billion given to various charities. However, this generosity also attracts malicious individuals who exploit the kindness of donors for their own gain, a practice known as charity fraud.

Charity fraud is a significant concern, classified under Relationship and Trust Fraud by the Federal Reserve's FraudClassifier model. These scams are often sophisticated, closely imitating legitimate charities to deceive donors.

Recognizing Charity Fraud: Scammers typically reach out for fake donations through standard communication channels used by genuine charities, including phone calls, emails, direct mail, door-to-door appeals, social media, and crowdfunding sites. They might also exploit recent natural disasters or emergencies to manipulate potential donors, sometimes engaging in additional frauds like insurance scams against those already affected by such disasters.

Safeguarding Against Charity Scams: Legitimate charities are flexible in accepting donations, using methods like ACH debit, checks, or credit/debit cards. In contrast, fraudsters often insist on immediate payment using untraceable or irreversible methods like cash, gift cards, virtual currencies, instant payments, or wire transfers. Donors should verify the charity's details, including names and website URLs, to avoid falling prey to these scams. It's also essential for you to maintain records of donations and monitor bank statements regularly for any discrepancies or unexpected recurring charges. Donors should contact their financial institution to dispute the charges for unauthorized transactions.

ADDITIONAL RESOURCES:

Charity Scams - How to Tell If a Charity Is a Fraud Charity and Disaster Fraud

The Internal Revenue Service maintains an online database where consumers can check whether an organization is a registered charity and whether their donation is tax-deductible.?

A victim of charity fraud can report it to the FTC ?and the government agency in their state that regulates charities.

The consumer can further report a charity fraud to the FBI at 1-800-CALL-FBI or visit?www.fbi.gov ?for more information.?