How to spot a charity scam

Fake fundraisers are the latest way in which fraudsters are conning victims out of their hard-earned cash. Scammers are using sophisticated technology, such as fake donation websites, to obtain people’s personal information and to fleece them out of their money.

Victims are made to believe that they are donating to charity or helping Ukrainian war victims and that it’s all being done legitimately. Action Fraud, the UK’s national reporting centre for reporting fraud and cybercrime, has already identified 196 bogus requests for fundraising to help victims of the Ukraine crisis.

Methods vary, but there have been cases where fraudsters are selling fake charity T-shirts or claiming to be Wladimir Klitschko, who is the brother of Vitali Klitschko, the mayor of Kyiv.

Millions of people are losing money to scammers around the world and, while the methodology changes to match current trends, the traditional scams are still proving equally successful.

Here we look at the scale of the problem, highlight some of the typical scams out there and offer tips on shielding yourself (and your money) from these scammers.

An international problem

According to the 7th edition of the Truecaller ‘Insights US Spam & Scam Report’, a whopping $29.8 billion (approximately R407,6 billion) was lost to phone scams in America over the past 12 months. Nearly 60 million Americans (23%) have reported losing money because of phone scams over the last 12 months – this is up from the 56 million (22%) who reported this in 2020. Fraudsters are not only contacting victims by phone but by SMS too, as well as via email and over social media. Identity fraud is also rife. In the UK, for example, 5.5 million Brits have fallen victim to identity fraud.

Fake fundraisers are the latest way in which fraudsters are conning victims out of their hard-earned cash. Scammers are using sophisticated technology, such as fake donation websites, to obtain people’s personal information and to fleece them out of their money.

Identity fraud, if done correctly, can be extremely lucrative for fraudsters as they can gain access to bank accounts, open a new card or bank account, or take out a personal loan in someone else’s name.

A local problem

A report by TransUnion released in December 2021 shows that South Africa is not immune to fraud and that there’s a spike in the levels of fraudulent transactions in the holiday season, particularly online.

TransUnion’s analysis found that 7.8% of all South African transactions between 25 and 29 November were potentially fraudulent. This is up from 7.5% of transactions identified in 2020. The South African Banking Risk Information Centre (SABRIC) highlighted in March this year that South Africans lost more than R1.5 billion collectively to banking and card fraud. But the figure could be much higher according to SABRIC, as this excludes other scams and people who are too ashamed of reporting the crime.

Other popular scams include pyramid schemes, which involve the promise of unrealistic returns to a small group of investors who are encouraged to recruit others (but typically those returns only get paid to the top of the pyramid while those at the bottom lose out), and money-flipping scams, where fraudsters make victims believe they can double or triple their money in a short period of time.

How can you help and protect your money?

There are several ways you can protect yourself from scam calls, texts, and emails. These include:

• Downloading a spam blocker/caller ID app: This is typically the predominant action taken after people fall victim to a scam, according to the Truecaller report.
• Making sure that the company you are dealing with offers its online services securely.
• Not being sucked into the lie – there are no shortcuts to building wealth.
• Making sure that you understand what it is you’re investing in. If the person selling you the ‘too good to be true’ investment scheme can’t tell you in simple terms where the money is being invested and how returns are gained, then don’t invest.
• Don’t invest in unregistered businesses. Make sure that any companies you invest in are regulated by the Financial Sector Conduct Authority (FSCA).
• It can be difficult to identify a charity scam, but don’t get suckered into the ‘charity story’ that can easily be told via phone calls or social media under fake names. There are many vulnerable people (victims of war and poverty) and animals that need our assistance, and there’s much you can do to help.
• However, if you’re not sure of which charities to support or don’t know if one is legitimate, rather make use of websites like Forgood.co.za and backabuddy.co.za who link registered charities to volunteers and financial donors. You can also check a charity’s credentials by asking for an NPO (not for profit) certificate, public benefit organisation certificate and evidence of SA Revenue Service clearance. If they’re claiming to be a charity from abroad, you can always verify their details with the Charity Commission or similar organisations.
• Keep track and monitor your chosen charity via social media to find out more about the causes that are supported and what they are raising money for.