It happened after September 11, Katrina, Sandy, the Boston Marathon, and other disasters, man-made and natural, around the world. After serious tragedies, when a compassionate public is at its most vulnerable, unscrupulous individuals find taking advantage the world's generosity comes easy. Within hours - even minutes - of the news, new operations spring up, offering to collect donations in support of victims. Thanks to today's electronic environment where sharing news is effective and fast, with only one mouse-click, well-meaning people spread information at a faster rate than ever. Who has time to fact-check when lives are on the line? That's how one message on Twitter, purporting that the owner would donate $1 to Boston's victims every time the message was shared, spread so quickly. Just pausing for a few seconds to look at the basic facts about the owner of that Twitter account should have been enough to signal the lack of validity to the statement, but the rewards of sharing such a message outweighed the risk. After all, the Twitter message wasn't asking anyone to send any money. In the scam spectrum, this was pretty tame. Once money is involved, the stakes are higher. Use common sense before giving any relief organization your money:
- An official-sounding name doesn't make an organization official. Make sure the organization shares important information online, like its founders and board members.
- Organizations must file with their state before soliciting donations. It's worth a call to the appropriate Department of State before sending money.
- Sites like CharityNavigator can tell you more about a non-profit organization, but even legitimate pop-up charities might not be listed in the immediate aftermath.
- The IRS website allows visitors to search for an organization's 501(c)3 (non-profit) status. But the IRS can take months to grant the status, so again, if timely giving is important, you might not yet know whether your contributions are tax-deductible.
- Don't give anyone cash, and don't give money to an organization that calls you out of the blue. The Office of the New Jersey Attorney General puts it best: Don't give simply because of a pathetic “sob story.”
Once you've parted with your money, your options are limited if you later find out the organization was fraudulent. Getting back your money could be a long process. There are some helpful suggestions from the New York Department of State, and I have amended with my own thoughts.1. Contact the authorities. You should report the suspected fraudulent charity with the details of the incident in which your money was solicited to the proper authorities. These include:
- Your state's Department of State, and the Department of State from wherever the fraudulent charity operates.
- The Attorney General's offices for both states. If there is enough evidence of fraud, the states will want to sue the organization to recover the money for the donors and possible pursue criminal charges as well.
- Contact the Federal Trade Commission and report the incident.
3. Recover your money.If you paid with a credit card, you're in pretty good shape. If you become aware of the fraud rather quickly, you can contact the credit card issuer. You will have to show that you made an effort to recover the money directly from the perpetrator, but a fraudulent organization will be difficult to contact after they take your money. Disputing the charge will most likely end up in a cancellation of your payment to the organization, and you won't be liable for what you paid. If you paid with a check that has already cleared, getting your money back might be more difficult. You might need to wait for your state to take legal action, and that could be a long process. In times of crisis, don't let your guard down. Compassion is a great virtue; I'm thankful knowing that the human spirit is alive and people, emotionally moved, are looking to help in the face of a crisis. I think everyone who's been aware of the news lately has seen similar support after the recent events, the bombing at the Boston Marathon and the explosion in West, Texas. The urge - the need - to help immediately is powerful, but it can't be an excuse for making bad decisions about money. Don't give money without due diligence, and if you find yourself a victim of a charity scam, report it to the authorities and warn others.