Nonprofit News

Spring 2016

Nonprofit News

Charities Can Be Targets for Fraudsters

March 16, 2016

Just as consumers can be targets for rip-off artists, so too can charities.

In one case, a nonprofit heard from a donor who said he wanted to make a $40,000 contribution and asked where to send the check. When the donor’s check arrived, it was written for $80,000, twice as much as the promised donation. The donor then sent an email, instructing the nonprofit to wire the $40,000 overpayment out of the county. Recognizing the scam, the nonprofit refused to wire the money. (Had the nonprofit deposited the “donor’s” $80,000 check, it eventually would have been returned as no good.)

Scammers use a variety of tactics to trick their targets into sending money. They may use threats or claim that action must be taken immediately to avoid some serious problem. Often, they ask their targets to provide payment using a wire transfer or prepaid card, both of which make it difficult to trace or recover payment after it’s been sent.

If you work with a charity or other organization, beware of common scams, including:

  • Overpayment scams. A “donor” offers to make a contribution but “accidently” provides payment for more than the expected amount, and then asks you to deposit the check and immediately send back the difference via wire transfer or prepaid money card. While your payment is valid, the “donor’s” check is not and will later be returned as counterfeit.
  • Utility shut-off calls. Someone calls, claiming to represent your utility company, and says your power will be shut off within hours unless you pay a few hundred dollars immediately using a prepaid money card. In reality, the caller is a scammer, and any money you send will be lost. (This scam often affects organizations that have a physical location where patrons visit, such as a church or restaurant.)
  • Phony invoices. You receive a fax, phone call, or letter demanding you pay a final invoice for advertising, office supplies, or other products you did not order. The con artist who sent the bogus bill hopes someone in your organization will pay the invoice before realizing it is phony.

To avoid scams, talk to your staff members about the signs of a scam, such as requests for payment sent via wire transfer or prepaid cards or unexpected phone calls demanding payment. Also encourage staff members to ask a supervisor about suspicious or questionable activity they encounter.

If you suspect a scam, report it to the Ohio Attorney General’s Office at or 800-282-0515.

The Federal Communications Commission also has issued a warning about illegal “pirate radio” stations that sell advertising time to charities and businesses. Pirate stations are those that operate without an FCC license. Sometimes the broadcasters may be rebellious high school students operating a radio station from their bedrooms. Others are slick, sophisticated, high-powered but illegal broadcast operations, the FCC reports.

Radio stations are required to be licensed, yet some broadcast without FCC authorization. These illegal broadcasts can be subject to a variety of enforcement actions that include civil and criminal penalties. These pirate stations can interfere with the broadcasts from licensed stations, preventing listeners from hearing legitimate programming as well as Emergency Alert System warnings aired by those broadcasters.

FCC rules require licensed broadcast stations to identify themselves each hour using their FCC-assigned call signs as close to the hour as possible. Some pirate stations may carry those types of announcements in order to mimic legitimate stations.

The FCC encourages consumers to contact the FCC with complaints about pirate radio operations. Additional information can be obtained at

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