Helping Older Consumers Avoid Charity
Fraud
Charities perform a variety of valuable services in our society. Many
are facing increases in costs and demands and decreases in funding. To
meet these financial challenges, charities are asking for larger
contributions from more donors - and they're asking more often than
they used to, often using telemarketing and direct mail solicitations
to raise funds for their causes, and often directing their pitches to
older consumers. In fact, AARP research shows that Americans aged 65
and older receive more telephone and mail solicitations for charitable
donations than any other age group. Fraudsters try to take advantage
of this population on the theory that older adults may be more
trusting and polite toward strangers, and that they're more likely to
be home during the day to receive phone calls.
Chances are you're in a good position to determine whether an older
person you care for or about is vulnerable to, or has been victimized
by, a charity scam. Here are some clues:
- Does the person get frequent calls
or direct mail requesting donations? This may indicate that the
person's name has been put on a list of willing donors.
- Does the person make lots of
payments to charities that you haven't heard of?
- Is the person having trouble paying
for regular expenses, even though there's been no change in income?
This may indicate that too much money has gone to donations.
Charitable-giving decisions should be one element of a person's
overall financial plan.
If you find that the person you care
for or about is a victim of fraud, carefully explain what has happened
and that he or she is not at fault. Help the person file a complaint
with the appropriate authorities. By filing a complaint, you may be
helping stop the fraud.
The Warnings Signs of a Charity Scam
Donors should avoid any charity or fund-raiser that:
- refuses to provide written
information about its identity, its mission, its costs, and how the
donation will be used;
- will not provide proof that a
contribution is tax deductible;
- uses a name that closely resembles
that of a better-known, reputable organization;
- thanks a potential donor for a
pledge that the person doesn't remember making;
- asks a potential contributor for
bank account or credit card information before the person has
reviewed the solicitor's information and agreed to contribute;
- uses high-pressure tactics to secure
a donation before the potential donor has had a chance to make an
informed decision about giving;
- asks for donations in cash;
- offers to send a courier or
overnight delivery service to collect the donation
immediately;
- guarantees sweepstakes winnings in
exchange for a contribution.
Charity Checklist
Consider the following precautions to ensure that your donation
dollars benefit the people and organizations you want to help. They're
good practices whether you're contacted by an organization's
employees, volunteers or professional fund-raisers, soliciting
donations by phone, mail or in person.
- Be wary of appeals that tug at your
heart strings, especially pleas involving patriotism and current
events. Although the Department of Defense does not endorse any
specific war-related charity, you can visit their Web site at
www.army.mil/operations/oif/FAQ.html
to find out about military relief societies that provide assistance
to U.S. Servicemembers and their families.
- Ask for the name of the charity if
the telemarketer does not provide it promptly.
- Ask what percentage of the donation
is used to support the causes described in the solicitation, and
what percentage is used for administrative costs.
- Call the charity to find out whether
it's aware of the solicitation and has authorized the use of its
name.
- If the telemarketer claims that the
charity will support local organizations, call the local groups to
verify.
- Discuss the donation with a trusted
family member or friend before committing the funds.
- Don't provide any credit card or
bank account information until you have reviewed all information
from the charity and made the decision to donate.
- Ask for a receipt showing the amount
of the contribution and stating that it is tax
deductible;
- Understand that contributions made
to a "tax exempt" organization are not necessarily tax deductible.
- Avoid cash gifts. They can be lost
or stolen. For security and tax record purposes, it's best to pay by
check, made payable to the beneficiary, not the solicitor.
Fraud Protection Tips
You can help protect the person you care for or about by helping to
locate legitimate charities. These organizations can be good sources
of free information about the charities you'd like to support.
BBB Wise Giving Alliance
4200 Wilson Boulevard, Suite 800
Arlington, VA 22203
(703) 276-0100
www.give.org
American Institute of Philanthropy
3450 N. Lake Shore Dr. Suite 2802 E
Chicago, IL 60657
(773) 529-2300
www.charitywatch.org
GuideStar
427 Scotland Street
Williamsburg, VA 23185
(757) 229-4631
www.guidestar.org
Where to Complain
If you believe an organization may not be operating for charitable
purposes or is making misleading solicitations, contact your state
Attorney General, your local consumer protection office or the Federal
Trade Commission.
The FTC works for the consumer to prevent fraudulent, deceptive and
unfair business practices in the marketplace and to provide
information to help consumers spot, stop and avoid them. To file a
complaint or to get additional information about wise giving, visit
www.ftc.gov/charityfraud or call toll-free, 1-877-FTC-HELP
(1-877-382-4357); TTY:
1-866-653-4261. Ask for the free publications Charitable Donations:
Give or Take? and Donating to Public Safety Fund-Raisers.
The FTC enters Internet, telemarketing, identity theft and other
fraud-related complaints into Consumer Sentinel, a secure, online
database available to hundreds of civil and criminal law enforcement
agencies in the U.S. and abroad.
May 2003 |
