Beware of a New Scam Targeting Nonprofit Organizations
By Jill Robisch, National Bank of Indianapolis
Nonprofit organizations, known for their mission-driven work and commitment to community welfare, are increasingly becoming targets of a sophisticated scam. This scam involves fraudulent donors sending counterfeit checks to nonprofits, only to follow up with a request to return a portion of the funds—before the organization realizes the check is bogus.
Here's how the scam typically unfolds:
1. Initial Contact: The scam begins when a supposed donor reaches out to the nonprofit, often presenting themselves as a well-meaning individual or a representative of a company. They express a desire to make a substantial donation, often targeting smaller nonprofits that may be less equipped to verify the legitimacy of the funds.
2. The Fake Check: The donor sends a check for a significant amount, which the nonprofit deposits into its bank account. The check appears genuine, and the nonprofit, eager to put the funds to good use, may not immediately question its authenticity.
3. The Refund Request: After the check is deposited, the scammer contacts the nonprofit again, claiming that they accidentally overpaid or need a portion of the funds back for some reason—such as an emergency or to cover a different expense. They request that the nonprofit wire the excess funds back or send a separate check.
4. The Revelation: After the nonprofit sends the requested refund, the original check bounces, as it was fraudulent. The organization is left with a loss, not only of the funds they returned but also of any bank fees incurred.