Battling the Storm: How to Protect Yourself from Disaster Relief Fraud
By Julie Williams, Staff Writer
With the oncoming warmer temperatures comes the possibility for severe weather—tornadoes, hurricanes, droughts, etc. When disasters such as these hit, our nation comes together to help the victims. Unfortunately, though, criminals lurk in the shadows of disaster relief efforts.
In the aftermath of hurricanes Katrina, Rita, and Wilma, fraudulent activity was so severe that the Department of Justice established the National Center for Disaster Fraud (NCDF) in 2005. [1]. More than 20 federal agencies, including the FBI and Department of Homeland Security, participate in the NCDF, which essentially acts as a center for the exchange of information related to disaster relief fraud. [1]. If the claims received constitute a strong enough suspicion, the NCDF passes along the information to the necessary authorities, which subsequently conduct an investigation. The latest numbers show that, so far, the NCDF has received and screened over 38,000 complaints and referred over 24,000 complaints to law enforcement investigation. [3].
There are many categories of disaster relief fraud, including contractor fraud, price gouging, and property insurance fraud. The focus of this article is how consumers can protect themselves from charitable solicitation fraud, which is the “act of soliciting funds by posing as a legitimate charitable organization.” [2].
A recent example of charitable solicitation fraud came in the form of a website seeking donations for food for firefighters in the wake of a massive wildfire. The site claimed that the group was hosting the official command center for 150 firefighters combating fires in the state of Washington. After investigation, local authorities discovered that it was all a fraudulent scheme. After said authorities questioned the website, it was immediately taken down. Unfortunately, though, the funds all went unaccounted for. [2].
Along with creating the NCDF, the federal government has also turned to tougher penalties in an attempt to deter such fraud. Specifically, a convicted person faces a maximum of 20 years imprisonment for fraud. However, if the fraud is conducted in connection with a natural disaster, the penalty increases to a maximum of 30 years imprisonment and a $1 million fine. [4].
Before making any donations, consumers should apply a critical eye and conduct due diligence. While the nature of disasters acts as a race against the clock, and therefore may not leave as much time to diligently research organizations and charities, there are a few methods that a donor can follow:
- Search a charity evaluation website, such as www.charitynavigator.org;
- Check to see if the organization is tax exempt by using the IRS portal at www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check;
- Run an online search by typing in “scam,” followed by the name of the charity;
- If responding to a solicitation, call the charity by using its official information. [5].
There are also some obvious red flags to watch for in regards to charitable solicitation. For example, it is suspicious for a charity to:
- Request donations in the form of cash or wire transfers;
- Use high-pressure tactics, such as pressing for immediate donations;
- Have a name that closely resembles a well-recognized charity; and
- Operate a social media account with little or no activity prior to the disaster. [5].
Donating to charities after natural disasters is a noble effort to help fellow citizens. While most citizens find it absolutely immoral that individuals would take advantage of such situations, it does happen. That is why it is necessary to practice due diligence and to make sure that the donations make way to the intended victims.
Sources
[1]. https://www.fib.gove/sandiego/press-releases/2015/fbi-warns-public-of-disaster-scams.
[2]. https://securityintelligence.com/disaster-fraud-criminals-capitalizing-on-catastrophes/.
[3]. Http://www.justice.gov/usao-edla/disaster-relief-fraud-program.
[4]. 18 U.S.C.A. § 1341.
[5]. http://www.fraud-magazine.com/article.aspx?id=4294978232.
