With the holidays quickly approaching, the season of giving for some reigns as the season of taking for many others. One avenue used to trick victims out of their money involves scammers fronting as representatives for charitable organizations. These charity scams operate by contacting victims and asking for donations to fund their efforts to combat some issue plaguing the world.
According to the FBI’s internet crime report, the total amount of losses caused by charity scams surpassed the overwhelming amount of $4.4 million in 2020. This is a drastic increase from the previous two years as 2019 saw a total loss of $2.2 million due to the fraud, and 2018 saw a loss of $1 million. With millions of victims tricked into sending their money to these scammers, it is apparent the amount of losses will certainly continue to rise.
Due to the overwhelming amount of trust given to charitable organizations, threat actors are able to easily exploit victims. Reported by the Better Business Bureau’s Wise Giving Alliance, Americans’ trust level in charities far exceeds those placed in other establishments, such as the media, or even the government. Along with abusing this ever-present trust, scammers will attempt to play on victims’ emotions by creating stories of great strife necessitating quick action. Scammers, while largely serving as representatives of fake charities, will also attempt to represent legitimate charities to seem more credible.
Scammers will use phone calls, emails, and text messages to trick victims into donating. Along with these more conventional methods, social media posts and crowdfunding sites are used to reach a large amount of people. Fraudsters will typically associate their campaign with recent national tragedies or the holidays due to the large emotional connection many feel for each.
With the recent COVID-19 pandemic, instances of charity scams drastically increased as threat actors saw the opportunity to pose as organizations, using donations to fight the outbreak. Following the trend of many other charity scams, threat actors capitalized on the masses’ fear of uncertainty to deceive and gather money from victims.
Oftentimes, victims would receive phone calls from individuals representing a charity. This representative would ask the victim if they would like to donate any amount to fighting COVID-19 in the forms of providing personal protective equipment to lower income communities, funding vaccine efforts, and increasing the amount of Covid tests throughout America. The victim would then give their card and personal information to the representative. From this stage, the threat actor has the capability to sell the victim’s information on darknet forums, or use their information as a means to contact more people, further adding to their scamming total.
Another recent increase in charity fraud occurred during early November, as Veterans Day neared. The Federal Trade Commission warned of scammers attempting to convince victims to donate under the guise of helping veterans throughout America. Like the COVID-19 campaigns, the charity scams surrounding Veterans Day largely took advantage of the sense of national pride and support for veterans many Americans feel during the holiday.
These scams largely followed similar methodologies to the pandemic scams as victims received phone calls from scammers posing as representatives for a charity. Then after emotionally manipulating the victim, the scammer would ask for payment information along with personal information like their phone number, email address, and full name.
To mitigate the effects of charity fraud, it is imperative to have an understanding as to how these scams spread and take advantage of victims. The Australian Competition and Consumer Commission provided some warning signs to look out for to best avoid being scammed. First and foremost, if the name of the charitable organization is unfamiliar, it is always best to refrain from donating. Similarly, if the representative from the charity is attempting to put pressure or shame someone into obtaining a donation or information, this is a likely sign of a scam.
Another factor to consider is the payment method offered by the charity representative. If the representative is seeking a donation via cryptocurrency solely, it would be best to forgo donating as this payment method is used by many scammers due to the anonymity factor and lack of regulation. Remember, there are many resources available to check the legitimacy of a charity, like Give.org and CharityNavigator.org.
Additional Charity Fraud Resources: