Question

In: Economics

 every major catastrophe, fire, as well as many personal events seems to bring out scams.  A...

 every major catastrophe, fire, as well as many personal events seems to bring out scams.  A particular area of fraud is charitable giving. Hurricane Sandy, 9/11, Hurricane Katrina and many other events have resulted in people seeking to take advantage of a sad situation.

How are charitable scams perpetuated?

What should a giver look for before making a contribution?

What are some recent scams and what has been done as far as law enforcement in this area?

What materials did you find on the internet that explains charitable scams and how to prevent them (attach that information to your posting).  Please comment to two of your fellow learners' postings.

Solutions

Expert Solution

1. Scammers are creative, cunning and cruel — and they often mix in a little truth to spice up their big lies. This scheme shows just how low they can go.

Government imposters claiming to be with the FTC, or another agency like the fictitious “Consumer Protection Agency,” are calling to inform people they have won a huge sweepstakes from the Make-a-Wish Foundation, a well-known charity for very sick children. To get the money, the callers say, the “winner” must first pay thousands of dollars to cover taxes or insurance on the prize. The call may even come from a 202 (Washington, DC) area code to appear credible — since the headquarters for the FTC and most federal agencies are in DC.

This is just a scheme using the well-known names of Make-a-Wish and the FTC to rob thousands of dollars from people. Once you wire money or send banking information, you will never see your money again.

2. Here are a few facts and tips to protect yourself and others:

  • If someone asks you to wire money or provide your bank account information over the telephone, it’s a scam.
  • Anytime you have to pay to get a prize, it’s a scam.
  • The FTC doesn’t oversee sweepstakes and no FTC staff is involved in giving out sweepstakes prizes. We do, however, go after sweepstakes scams like this one.
  • If an FTC case results in refunds, you can find the details at ftc.gov/redress.
  • The Make-a-Wish Foundation has information about this specific scam on its fraud alerts page.
  • If you encounter this or other scams, report it to the FTC at 1-877-FTC-HELP or ftc.gov/complaint.
  • Talk to your friends and family about scams. Visit FTC.gov/PassItOn to find out how.

3.

The top six scams in order:

1. Fake checks
2. Bad Internet sales – products never delivered or misrepresented
3. Sweepstakes/prize/free gift cons that request payment to get your winnings.
4. Advance fee cons that promise a loan or line of credit, if you pay them first.
5. Phishing scams that attempt to get personal information to get access to your accounts, your tax refund or to open credit cards in your name.
6. Recovery/refund cons that promise past victims a recovery of swindled funds in exchange for a fee.

4. The FTC is the only federal agency with both consumer protection and competition jurisdiction in broad sectors of the economy. The FTC pursues vigorous and effective law enforcement; advances consumers’ interests by sharing its expertise with federal and state legislatures and U.S. and international government agencies; develops policy and research tools through hearings, workshops, and conferences; and creates practical and plain-language educational programs for consumers and businesses in a global marketplace with constantly changing technologies. FTC’s work is performed by the Bureaus of Consumer Protection, Competition and Economics. That work is aided by the Office of General Counsel and seven regional offices


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