New York Department of State’s Division of Consumer Protection
The
charitable spirit of New Yorkers is at an all-time high during the holiday
season, so this week’s tips are meant to serve as a guide when choosing causes
to donate to so donations get to the right place and not in the hands of
scammers.
“The season of
giving is in full swing, and people are purchasing gifts for loved ones and
making generous donations to causes they care about,” said Secretary of State Robert J.
Rodriguez. “But before making these donations, it is important
to remember that scammers like to prey on the good intentions of people, and we
encourage New Yorkers to do their research before making donations so that
these good deeds reach the right place.”
Charity scams
can happen at any time, but they are more prevalent during the holiday season
when donors are moved by both generosity and the end-of-year deadline for
securing tax deductions. Charity scams also increase after a natural disaster
or emergencies, collecting millions of dollars from unsuspecting donors. On
many occasions, these fraudsters pretend to be affiliated with well-known
organizations or even the government to scam people out of their hard-earned
money. According to the Federal Trade Commission, in 2022, there were
10,217 reports of charitable solicitation fraud resulting in $21 million in
losses. This is a drastic increase from 2019’s 3,872 reports of charitable
solicitation fraud resulting in $6 million in losses.
Tips
to Help Avoid Charity Scams:
- Check the legitimacy of the charitable organization. Charities located or engaging in substantial
fundraising in New York State should be listed on the New York State Attorney General's database of registered charities. Research before you donate by
visiting The Office of the New York State Attorney General's Charities, Nonprofits & Fundraisers page to verify registration, and by checking websites such as www.bbb.org, www.give.org and www.guidestar.org in addition to visiting the charity’s website. If
donating toward relief efforts, visit a site such as disasterphilanthropy.org to ensure your donation is really going where it needs
to.
- Learn to detect a phony charity. Some scammers will create fake “charities” and try to
trick you with names similar to well-known charities. Pay attention to the
charity’s full name, web address, contact information, donation policies,
etc. Scammers may copy or mimic the name of a familiar, trusted
organization to swindle you.
- Designate your donation. Ask how your donation will be allocated between direct
services and administrative fees. Unless you designate a specific purpose
for your donation, it will go into the organization’s general fund, so
make sure to note if you are sending money for a specific purpose (ie:
“Playground Fund”).
- Be cautious of third-party fundraisers. If a solicitation comes from a third-party company, the
charitable organization will receive only a percentage of your donation.
If you want to ensure the charity receives the whole amount, donate
directly to the charity instead. For more information, access the New York
State Attorney General’s website and review the annual “Pennies for
Charity” report.
READ MORE: It pays to give
- Pay attention to vague claims. Be on alert for claims without any clear plan such as
“all proceeds go to cancer treatments” or “donations go to veterans who
can no longer work.” Instead do some research on the charity before you
decide.
- Resist high-pressure tactics. Charity fraud scams can come in many forms, whether by
email, social media, crowdfunding platforms, cold calls, etc. Watch out
for direct e-mails from “victims” and solicitors who employ
heart-wrenching stories, insisting that you donate immediately. It is
highly recommended to never provide personal information to unsolicited
telemarketers, but instead ask the caller to provide you with the full
name of the charitable organization, , website address and contact
information to research and verify.
- Find out who's behind the crowdfunding request. Online crowdfunding websites like GoFundMe and Indiegogo make it easy for people to create crowdfunding campaigns. To
protect yourself, remember to only give to people you know directly. It’s
also important to understand the crowdfunding site’s rules, policies, and
vetting procedures. It can be helpful to know these ahead of time to
determine how they are protecting consumers from potential fraud.
- Never disclose personal information. Do not provide any personal information such as your
credit card number, Social Security number, or any other personal
identifying information in response to an unsolicited charitable request.
- Never give cash.
Give your contribution by check or credit card to ensure that you have a
record of the donation. Make checks out to the charity, not to an
individual. If you choose to make a donation via a charity's website,
check that the website is secure and that your computer is equipped with
the latest anti-virus protection. Check for the padlock to the left of the
URL search bar to ensure the site is secure. Do not send funds to anyone
asking for bitcoin or cryptocurrency as these payments typically have no
protections against fraud.
- Don’t mail checks from public collection boxes: According to the US Financial Crimes Enforcement Network (FinCEN), the number of check fraud crimes nationwide has
increased since 2020. To avoid this fraud, go directly to the post office
to deposit mail. If you need to use a public U.S. Postal Service
collection box, try to do so before the last pickup of the day to minimize
the amount of time the check spends in the box.
- Double Check before you deduct. Donations made to individuals or organizations that
are not tax-exempt are not deductible. To find out if a donation will be
tax deductible, research an organization’s tax-exempt status at the Internal Revenue Service Tax Exempt Organization Search. Request a receipt and track the status of your
donation.
The New York
State Division of Consumer Protection provides resources and education
materials to consumers on product safety, as well as voluntary mediation
services between consumers and businesses. The Consumer Assistance Helpline
1-800-697-1220 is available Monday to Friday from 8:30am to 4:30pm, excluding
State Holidays, and consumer complaints can be filed at any time at www.dos.ny.gov/consumer-protection.
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