One of the newest scams to develop over the past few years is related to fundraising efforts for those who have survived catastrophic events. Hurricane Katrina, the floods in Australia, and the devastating earthquake in Haiti left many families and homes devastated and destroyed which drew on the sympathies of many who wanted to help, but were at a loss as to the best methods. Fraudulent telemarketers saw these events as an opportunity to make it big in a very short amount of time.
One way to identify a scam from a legitimate non-profit organization is in the name. For example, instead of the American Cancer Society they may call themselves the American Cancer Center or Fund. In calling individuals they often attempt to sell a product that will benefit individuals in need or solicit donations. The sheer strategy of preying on the altruistic impulses of people who only want to help only opens the door for repeated visits using different names and causes.
Although they promise the funds collected or a portion of the proceeds will go to provide the services, food, medical supplies, and equipment needed in times of needs, in fact, the money goes nowhere except into the pockets of the con artists. Another scam is called “donated back tickets.” This is where individuals are asked to buy tickets to an event for a needy person when, in fact, the tickets are actually neither purchased nor distributed to those who would benefit most.
Although statistics on the number of victims for this type of crime is unknown, because many victims remain unidentified, last year the Better Business Bureau and FBI received 343,000 complaints of which over 5,000 were referred to law enforcement for prosecution. In one state alone this type of scam equated to over $100 million of which the professional charity received very little. When telemarketing agencies are subcontracted by legitimate charity organizations, such as in this case, they can expect to receive only about 30 cents on the dollar. However, there are many telemarketing companies that retain all funds received for personal use.
According to the Federal Bureau of Investigation, this type of crime is growing and is very difficult to stop. Not only are victims reluctant to make the needed reports, but the perpetrators are excellent at hiding their operation. This has had a serious impact on legitimate charities who are suffering from the fact that determining the difference between a genuine organization and a scam is extremely difficult. However, there are ways to give to others while ensuring the money is going where it is intended.
According to the FBI you should always check out unfamiliar companies and charities through local consumer protection agencies. These might include the Better Business Bureau, state attorney general, National Fraud Information Center, and watchdog groups. Additionally, before you donate money find out what percentage will actually go to the charity and always take your time making a decision. Legitimate companies generally don’t pressure you into making snap decisions. Finally, if you feel like you may be the victim of a scam, report it immediately to state, local, or federal law enforcement agencies. The only way to stop this type of crime is to catch the scammers.