Charity alert: Don’t fall for overpayment scams

BBB and Idaho Attorney Generals office have been called about persons making overpayment charitable contributions to non-profits in the state.

The scam works like this:  the thief uses a credit card or online payment account such as PayPal to make a large donation through the non-profit’s online donation page. He then contacts the organization and says the amount was a mistake.  For example, a $5,000 donation was meant to be only a $500 donation.  He asks the organization to refund the difference, typically to a different account than the one used to make the donation.  Sometimes the scammer claims the original account had to be closed for security or other reasons.

Attorney General Lawrence Wasden says, “My office has warned individual Idahoans for a several years to be wary of offers to overpay for advertised goods or services.  More recently, we have received reports of a variation on that theme targeting non-profits that receive donations online.”

Characteristics of scam donations include unusually large donations, unusual donor demographics (such as donations made from outside the usual geographic location of most donors), grammatical errors in the refund requests, and the supposed closure of the donor account which then necessitates the refund be made to a different one, he says.

Non-profit organization that receive questionable donations should contact their credit card processor, the credit card issuer from which the donation was made, and, if known, the issuer of the card to which the “refund” was requested.

Dale Dixon, CEO for BBB serving Snake River Region, says “Do not use the contact information provided by the phony donor. Research and find the information separately.”

BBB offers the following advice to business owners to help find and avoid overpayment scams:

  • Know who you’re dealing with. Ask for and verify the buyer’s name, street address and telephone number.
  • Don’t accept a check for more than the purchase price of the product or service. If the buyer refuses to pay the correct amount, return the payment and do not send the merchandise.
  • Don’t assume that the check is legitimate, just because your bank accepts it for deposit. It may take weeks for the bank to learn that it is counterfeit. You are the party who is ultimately liable to your financial institution.
  • Verify all accounts, checks, money orders and credit cards with the issuing bank. Ask for the name and place and then get phone number from directory assistance or a trustworthy Web site, not from the person who gave you the check. You may want to ask for a check drawn on a local bank or a bank with a local branch.
  • If a customer objects to providing any of the information requested, explain that these rules are for their protection, as well.
  • If the customer still refuses to say, abandon the conversation and recommend that you are not ready to do business this way.

Suspicious donations can also be reported to the Internet Crime Complaint Center at: http://www.ic3.gov.

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1 Comment

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One response to “Charity alert: Don’t fall for overpayment scams

  1. Mark Burrows

    Most charitable institutes have been aware of this scam for years. This is why it is so important to give and document the donor with a receipt for tax purposes. Any charity that does not register and therefore not recognized to be a charitable institute, I say they are operating at their own peril.
    In my eyes many non profit organizations themselves are flying well below the radar and are guilty of privateering and pocket lining. So it is a two way street.
    If a solid established charitable institute receives such a communication of an overpayment, they will politely tell the donor in question that it will take a few days to track the donor receipt and will contact them immediately on verification. What they actually will do is freeze those funds, and call the authorities. The thing is, the larger well known charities do not like to messed with. The downside of such big charities is they spend so much of the donors capital on staff, security, advertising, gala balls, and other such events that the amount they collect is in the hundred million area and what is going to the cause is any where from twenty million down to as low as four million. It just goes to pay for caterers, event organizers, entertainment, and massive campaign advertising for the cause.
    So, this being known, smaller organizations will make much less effort, do most of the work themselves and use non paid energetic volunteers, and raise maybe three or four million, and give the cause eight hundred thousand and pocket the rest simply because it is the standard.
    So, I only give to a very few charities and it is that simple. They know their business, and certainly have been around so long they would not be caught by the overpayment scam.
    If you really want tips about charity. Here is some. First. Don’t attend any galas or events, what you donate may not even make a dent. Don’t donate during TV telethons, Again, this is just throwing out a blanket to catch as much loose change as they can. They rarely raise enough money, it is more of a community thing to make you feel good and have your name flash across the bottom of the screen for your half a second of infamy.
    Also, if it is for emergency relief, put that on your check. For example if you send a donation to Red Cross put on the front of the check for relief due to Typhoon Haiyan in the Philippines. They are obligated to do so.

    Mark Burrows

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