Since the attacks on the World Trade Center and the Pentagon, numerous charities have been set up to help those in need. Unfortunately, there are some who want to take advantage of this tragedy and claim they are raising money for charity organizations that have not been thoroughly investigated. The money they raise might not be going to the people they claim to be helping.
Older Americans, especially those over age 65, should be cautious in responding to charitable solicitations in the aftermath of last week's terrorist attacks in New York and Washington, according to the American Association of Retired Persons (AARP). Katie Smith Sloan of the AARP joined the Early Show to talk about how older Americans can avoid charity scams.
What scams have you heard of since the attack?
The National Fraud Information Center has told us of a few. One such scam group has asked people to send a dollar to help victims. Another has asked people to send money via wire (Western Union) to help computer technicians track the terrorists using computers.
What advice do you have to avoid these scams?
The advice I would give is to be cautious and be skeptical. Now is the time that fraud charities are running rampant. Each week they change their pitch as the news changes: This week give to police funds; next week the same group could call for money for firefighters. It could be the same people making all the calls each week. Also, ask lots of questions. Don't let your emotions make your decisions.
Don't use your credit card. Ask them to send you material in the mail. If they are not a legitimate organization, they will not have material to mail to you. Be ware of door-to-door solicitation and ask them for ID. Also, know that most of the money collected in buckets on counters in stores asking for spare change never gets to the charity they are advertising. The bottom line is that these charity scams divert money from legitimate charities and now is the time that they need the money most.
Seniors are targeted for fraud because there is a perception that they are trusting and not going to ask questions. They tend to be home more and answer the phone and want to stay on the phone to hear the person out and make their decision on emotional feelings and not fact.
You can protect your money by knowing who you are giving to and by coming up with a plan and sticking to it. Don't get persuaded by a new charity that comes on and says they need your money.
It's hard to know how much of your money is going to helping--not just to raising money or administration. That information is hard to come by even from some of the more reputable charities. Some do publish annual reports on this. You have to dig for this information.
The AARP offers the following tips on careful charitable giving:
- Before you make a donation, be certain that your money is going here you want it to go. Just because someone claims they are raising money on behalf of a charity does not mean your money will get into the right hands.
- Some of the warning signs of a scam include--a request for your credit card number; use of a similar-sounding name that suggests a well-known charity; offering to send someone to pick up your contribution; expecting payments for gifts like greeting cards and address labels; threatening to report to credit bureaus if pledges are not paid; and failure by the solicitor to explain the operations, administrative costs, and programs.
- If you don't know the organization asking for money, take the time to get more information. You should ask for the charity's full name, address, and telephone number and find out how much of your donation actually goes to the charitable cause. Also ask for written information about the program.
- Protect your charitable dollars. Once you've decided to make a donation, still take precautons: Write a check instead of using cash; make your contribution directly to the charity, not the fundraiser; don't give your credit card number, social security number, or other personal information over the phone; and if your donation is tax deductible, get a receipt.
The Council of Better Business Bureaus has also issued standards for charitable organizations.
Here are a few of them:
- Availability of information--The organization should provide on request a copy of the annual report and financial statement.
- Use of funds--At least 50% of total income is to be spent on program service activities. Total fundrasing costs should not exceed 35% of total contributions.
- Solicitations--They need to be accurate and truthful.
- Fundraising--Should not be conducted with excessive pressure.
- Governance section--The organization should not have a conflict of interest with board members and firms.
For more information on how to protect seniors from scams, visit www.aarp.org.
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