Author: Bruce Lund

According to the Giving USA Foundation’s annual report on U.S. philanthropy, Americans contributed nearly $485 billion to charity in 2021. Unfortunately, this willingness to donate money opens a door for scammers, who capitalize on donor’s goodwill to steal money. Charity fraud scammers succeed by mimicking the real thing. This fraud is an example of Relationship …

This fraud is an example of Relationship and Trust Fraud under the Fed’s FraudClassifer model.

HOW TO IDENTIFY THREAT: Scammers solicit “donations” by contacting victims using the same channels as legitimate charities, such as telemarketing, direct mail, email, door-to-door solicitations, social media, crowdfunding platforms, and cold calls. Scammers may also use natural disasters or other emergencies to commit fraud. For instance, scammers may commit insurance fraud against natural disaster victims, re-victimizing people whose homes or businesses were damaged by the disaster.

HOW TO PROTECT AGAINST THIS THREAT: Real charities will accept donations using any method available to the donor, such as ACH debit, check, or credit/debit card. Scammers will request payments immediately using payment methods that are difficult to trace and provide the scammer guaranteed funds such as cash, gift card, virtual currency, Instant Payment, or wire transfer. Donors should verify the charity’s names and web addresses before donating. Consumers should also keep records of their donations and view their bank accounts regularly to ensure they weren’t charged the incorrect amount or unknowingly signed up for a reoccurring donation. Consumers who find incorrect or unauthorized entries on their accounts can dispute entries with their financial institution.

The Internal Revenue Service maintains an online database where consumers can check whether an organization is a registered charity and whether their donation is tax-deductible. Click here.

A victim of charity fraud can report it to the FTC and the government agency in their state that regulates charities. The consumer can further report a charity fraud to the FBI at 1-800-CALL-FBI or visit www.fbi.gov for more information.

Coaching kids to stretch a buck on spending

February 15, 2024

By getting your kids more involved with understanding money, many of us could not only reduce expenses but also help our children learn a life lesson. Here are some ways you can involve your kids.

Coach your kids on the concept of budgeting. You might take a couple of dollar bills out of your wallet and explain that spending too much now means there may not be enough later for something else they want (say, a winter trip or summer camp)—a concept a schoolchild of any age can grasp.
Set a budget that encourages them to plan. For example, some parents pay for all academic supplies, then provide each child $100 for other back-to-school needs. The kids are free to stretch the $100 using money they’ve earned or saved. If they’re alarmed about this budget, brainstorm with them about ways they can earn more. (See #5.)
Help them inventory what they already have. Can they reuse backpacks or sports equipment? If there’s peer pressure to have something “new,” how about personalizing those possessions with stickers or stencils?
Ask them to make a list of what they really need. Have their needs really changed? If new clothing is essential, can they mix in clothes from their closet later on?
Hold a yard sale of outgrown or unneeded stuff to raise money. While you’ll probably want to oversee the sale, encourage your kids to get involved in the pricing, set-up, and selling. They’ll value the profits more, having worked for them.
Avoid paying full retail. Start with discount stores and other nearby consignment shops. Teens who like to dress distinctively may find bargains at resale shops, outlet stores, and vintage clothing emporia. If you do need to buy “new,” peruse sale flyers and search for online coupons first. Above all, stick to your shopping list.
Consider sharing with the less fortunate. Many communities have an organization that provides items to truly needy kids. If you come upon a great deal, buy a little extra and donate it. You won’t save money, but you’ll gain rewards of another kind. Your children will, too.