Always ask for information in writing before you give. Never give out personal financial information over the phone.
Disasters can inspire compassion and generosity -- the finest emotions in people. However, it can also bring out duplicity and greed in con artists who use disasters to defraud people.
The Federal Trade Commission (FTC), states' Attorney General and the American Association of Retired Persons released a survey on Nov. 12 stating that an estimated $1.43 billion in donations got misused or stolen in 1995.
That amount included funds supposedly given to aid disaster victims, but ending up in the pockets of unscrupulous charlatans.
These scams either pose as legitimate organizations or are actually established telemarketers who solicit money, only to keep the bulk of the donations as "fees." Any time an entity makes false or deceptive statements about the destination of the money, the FTC and state attorney general can move in with injunctions or criminal charges.
"During the South California fires and Midwest floods we had people posing (as aid workers) to raise money," said Charles Harwood, Seattle Regional Director of FTC. "They're very opportunistic."
The urgency and compassion that is associated with disaster responses make the atmosphere ripe for abuse. But by the time the abuse is reported, many of the outfits have stopped calling and are pursuing other ventures.
"They quickly pop up, and by the time we hear about any potential crimes, they've disappeared," said Harwood.
When not diverting charity money, these operators also engage in phony police associations drives ("badge fraud") and fake anti-drug organization pledges. Harwood said that career phone swindlers switch their "pitch," making emotional appeals on behalf of victims.
"Give with your mind as well as your heart," said Connecticut Attorney General Richard Blumenthal, a contributor to the survey. "Always ask for information in writing before you give. Never give out personal financial information over the phone."
Most states require charity groups to register, but some legitimate disaster aid groups are formed quickly and do not have any recorded public records.
"It's very hard to monitor charities that spring up after tragedies or disasters," said Jennifer Lammers, of the New York Better Business Bureau's Philanthropic Advisory Service. "They may be history by the time we get their information recorded."
Lammers said that some scams can run as briefly as a couple days.
"The most reliable thing to do is to go with better known names, established charities," Lammers said. "It sounds terrible, but its safer to go with a recognized charity than with a good-intentioned soul."
But some con artists use name of a famous group to give their pitch authenticity. Other charities with titles similar to legitimate groups, "sound-a-likes," to deceive consumers by playing on name recognition.
"Many times they will say they are acting 'on behalf of' another, well-known group. Don't hesitate to call that group," said Harwood.
Law enforcement officials and consumer advocates agree that the way to beat these scams is to ask questions. First, ask for details of the organization, including paperwork.
The FTC also advises to resist being swayed by emotional appeals; don't give in under pressure. Legitimate fund-raisers won't push you to give on the spot. Also, be wary of charities offering to send a courier to collect your donation.
"Get something in writing, get phone numbers and step away. Do the calling and the research," advised Lammers.
CHECKLIST FOR CHARITY INVITATIONS
*Ask the caller to identify himself or herself clearly and ask whom he or she works for. If the solicitor refuses, just hang up.
*Watch out for names that resemble legitimate organizations but are somehow different. Some phony charities use names that sound similar to legitimate charities.
*Don't be swayed by emotional appeals and don't give under pressure. Legitimate fund-raisers won't push you to give on the spot.
*Be wary of charities offering to send a courier to collect your donation.
*If you are suspicious of an organization, contact your state attorney general.
*Ask the caller for written information about the organization, including written information and name, address and phone number.
More links on How to Help
More links on Monetary Contributions
The FTC has posted a web page with helpful information:: Operation Missed Giving