A natural disaster like Hurricane Harvey and Hurricane Irma, which wreaked havoc on Texas, Florida and the Caribbean in the last week, brings out the best in people. In the wake of some of the worst storms ever, we saw many examples of neighbors coming together to help other neighbors. We also saw volunteers come from across the country to do what they could to help those who were victimized by the storm. Donations of cash and other essentials also poured in to help.
Unfortunately, a natural disaster like Hurricane Harvey also brings out the worst in people. Scamsters see a natural disaster as a chance to cash in, an opportunity to profit from the misfortune of others. Their scams take many shapes and will certainly target those affected by the storm but will mostly target those of us who want to help. This article is meant to highlight some of the things we need to watch for to make sure that our aid ends up where it is intended. (For more, see: 7 Signs of a Charitable Disaster Scam.)
How to Avoid Fraud
The IRS issued a warning this week reminding people to be cautious about making donations to organizations that say they are helping the victims in Texas. The warning pointed out that the fraudulent schemes may come from a variety of places, including telephone, social media, email, or even in-person solicitations.
Doing a little research is the key to making sure that criminals don’t hijack your acts of kindness. If you plan to donate online, you should take the same precautions that you do to avoid online fraud in normal situations. Stay away from suspicious websites. Often, the criminals will create websites with a similar name to a legitimate, recognized organization. After Hurricane Katrina hit in 2005, the FBI said that 4,600 websites soliciting donations for relief were set up. Most of them were fraudulent. The IRS provides an online tool, the Exempt Organizations Select Check, that allows you to check the legitimacy of an organization and its ability to receive tax-deductible contributions.
It’s also important to take precautions when dealing with unsolicited emails and phone calls. A couple of good rules are to never click on an unknown link in an email, and don’t answer calls from numbers you don’t recognize. Also, be careful about any GoFundMe campaigns, and always make your contribution by check or credit card, paid directly to the charity. The U.S. Justice Department also released a warning this week about post-Harvey fraudulent charitable schemes. It is recommended reading for anyone considering a donation.
If you are planning to make a donation, there are many reputable organizations that can help. The American Red Cross and United Way are a couple of the most well known. Businesses are contributing in a big way, most of them funneling their contributions through the Red Cross. There are also some organizations that will enhance your donations. Walmart and the Walmart Foundation announced that they would provide a two-for-one match of customer donations up to $20 million in cash and product. TD Ameritrade Institutional, the firm that we use to custody our client investment portfolios, also announced a donation-matching program in which donations will go directly to the Red Cross. There are others, but these are a couple of examples of how you can donate and be confident that your donations will end up where they are most needed. (For more from this author, see: Don’t Recognize the Number? Don’t Answer the Call.)