The FTC Is Watching Out For You

by Ron Haynes

I recently received an email from the Assistant Director in the Consumer & Business Education at the Federal Trade Commission (who knew they read my blog?), informing me about a new resource to help you and me avoid charity fraud. I thought this was a great resource and wanted to share some of it here.

From the FTC Charity Fraud website:

A flyer in the mail, a phone call, a personalized email — everyone receives requests for donations in one form or another. Many legitimate charities use telemarketing, direct mail, email and online ads to ask for contributions. Unfortunately, scam artists also use these techniques to pocket your money. If someone asks for a donation, take your time and familiarize yourself with the charity:

  • Ask for the charity’s name, address, and phone number, and written information about its programs.
  • Ask whether the person contacting you is a professional fundraiser and how much of your contribution will go to fundraising costs.
  • Check the history of the organization with the office that regulates charities in your state.  For a list of state offices, visit the National Association of State Charity Officials. 

Simply having the words police, firefighter or veteran in an organization’s name doesn’t mean that these groups will benefit from the money raised. If you want to give to one of these causes, use a charity that has a good track record. Charities that pop up overnight can disappear just as quickly.

For more specific information, check out the FTC’s tips for supporting the troops.

You should also know the warning signs of a scam:

  • High pressure pitches. Reject them: It’s okay to hang up.
  • A thank you for a pledge you don’t remember making. Be skeptical; scam artists will lie to get your money.
  • Requests for cash. Avoid giving cash donations.  
  • Charities that offer to send a courier or overnight delivery service to collect your money.
  • Charities that guarantee sweepstakes winnings in exchange for a contribution.
  • Charities that spring up overnight, especially those that involve current events like natural disasters, or those that claim to be for police officers, veterans, or firefighters. They probably don’t have the infrastructure to get your donations to the affected area or people. 

For more detailed information about charity donations, read Charitable Donations: Give or Take.

Many thanks to Mr. Woods for bringing these resources to our attention.

About the author

Ron Haynes has written 1001 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.


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{ 2 comments }

app103

Another thing to watch out for:

Someone claiming whatever they are selling (magazines, newspapers, or whatever), a portion goes to help the Girl Scouts, Special Olympics, Boys and Girls Club of America, Police Athletic League, etc.

I used to work for a telemarketing company that sold magazines over the phone, contacting anyone that was listed in the phone book. (I only lasted about a week, before my conscience made me quit)

Their sales pitch always included some organization meant to tug at your heart strings, with claims that buying one of their seriously inflated magazine subscriptions would help that organization.

The truth was that while the company did send these nonprofit organizations a portion of the purchase price like they said would, very little of the purchase price went to those organizations. The amount was usually like $0.10 from a $75.00 subscription.

They made it seem like the reason why the price was so inflated was because of the contributions to the charities, when in fact that wasn’t true.

It was to make more sales at a higher price than if they had sold the same subscriptions at $20.00 without the charity names involved, like everyone else.

The sad part is that what they were doing was legal, since they didn’t actually lie about making contributions to the organizations…it just wasn’t as much as the customer assumed.

And that’s the point. Don’t assume. Ask questions, specifically how much will go to that organization they are claiming to be selling merchandise for, especially if the price of that merchandise seems inflated.

Honestly, if you want to help those nonprofit organizations more, buy a normal subscription from someone else selling it at a reasonable price and send the charity the difference, directly. Or skip the magazines and send the whole thing directly to the charity.

Ryan P Smith

Ron,

Great post, thanks for bringing the FTC site to our attention. I had never thought of checking out charities with the FTC. Charity Navigator is another good source for checking out charities before you donate time and money.

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