ACNC warns donors: beware scams

The Australian Charities and Not-for-profits Commission (ACNC) is warning the public ahead of the Türkiye and Syria earthquake to be aware of scam appeals for donations. Not only do scams rob compassionate people of their money, they also divert much needed funds away from those in need. Whilst fraudulent activity occurs year-round, fake charities particularly exploit major events. The ACNC is encouraging Australians to take steps and ensure the legitimacy of charities before donating any money. Here is a simple guide to protect your donations and information.

Fake Charity Disaster Appeals

The current Türkiye-Syria disaster, which has devastated a region as large as the United Kingdom, has seen fake charity appeals resurface at full throttle. Natural disasters and emergencies tend to be a major target for illegitimate fundraising activity. The ACNC is reminding us it is a time for particular vigilance, though these fraudsters are always around.

Over 790 reports of this scam type were made in 2022. Scamwatch, an initiative of the Australian Competition and Consumer Commission (ACCC), found Australians lost over $418,000 to fake charities last year. ACNC commissioner, Sue Woodward, said this figure was likely “the tip of the iceberg”.

“Australians, sadly, lose hundreds of thousands of dollars to fake charity scams each year, we don’t know the exact amount.” 

“I know Australians are very generous and they turn to charities to provide help at times like these,” she told Pro Bono.

It is the generosity of Australians that makes us vulnerable to fake charities and appeals. While many of us are aware of the possibility of scams, the cons are getting harder to spot. Tactics used are getting increasingly sophisticated. This all may sound like fake charities are impossible to avoid, but the good news is it is possible to avoid them. So what can you do about it? 

1. Know how a fake charities work

Fake charities are fraudulent organisations or individuals that appear to be legitimate but are actually scams. They try to solicit donations or personal information from you. The purpose of these activities is always for their own gain; further fraudulent activities or identity theft is their objective.

Scam appeals and fake charities often use convincing techniques to gain information or donations. They may create a fake website or charity, use high-pressure sales techniques, and sometimes even impersonate an existing charity or organisation. 

Last month, the West Australian government put out a warning after scammers posed as a legitimate registered charity to falsely collect donations via a fake Instagram page. Leedal Pty Ltd is an Indigenous-owned, legitimate organisation in Fitzroy Crossing and Leedal Foundation Limited is their registered charity. The scammers, though, were sending direct messages to existing donors, asking them to purchase Amazon cards for further help for Fitzroy Crossing flood victims. 

Commissioner for Consumer Protection, Trish Blake, said scammers often use social media to lure victims.

“There may be pop-up ads on social media sites or scam pages with evocative imagery that direct people to fake websites where donations are stolen, as well as personal and credit card information,” she said.

There are many warning signs to be aware of. These include:

• websites that look identical to a legitimate charity site, but have changed only the details of where to send donations
• spelling, grammar, or language errors throughout the text
• strange looking urls or email addresses
• not being given a receipt, or the receipt given does not have the charity's details on it
• being pressured or made to feel guilty if you don't want to donate
• being asked to provide a cash donation as they don't accept cheques 
• asking for the cheque to be made out to them rather than to the charity 
• the person collecting donations on behalf of the charity does not have any identification

2. Check legitimacy, warns ACNC

Donors should always do research before donating to any charity to ensure it is legitimate. Fake charities are an ongoing problem in Australia. The current devastation in Türkiye and Syria prompted the ACNC to send out their recent warning for Australians to look out for scams.

“Many people will be getting prompts to donate to appeals in their social media feeds and in emails,” Woodward said.

“We strongly advise donors to look for established, registered charities running verified appeals. Before giving to someone that claims to be from a charity, take a moment to check the ACNC’s Charity Register.”

The ACNC Charity Register is a list of Australia's registered charities. It shows details about a charity and its purposes, the names of the people involved in running the charity, as well as financial information and annual reporting. The Register can be used to check if a charity is registered and to find out specific details about a charity's operations or programs. It is free and accessible to everyone. 

The ACNC recommends the following steps to avoid fake charities:

• Look for established, registered charities running verified appeals
• Check the Charity Register to see details about a charity’s main work
• Don’t click on links in unsolicited emails and social media posts which may take you to a fake, scam website. Find the charity’s website in a search engine or on the Charity Register.
• Don’t give your credit card and bank account details on social media 
• If you get a call claiming to be from a charity, say you’ll call back. Search the Charity Register and call back on the number shown there.
• Always ask for identification from collectors at a shopping centre, on the street, or at your front door

3. Use a trusted online fundraising platform

Trusted online fundraising platforms like mycause offer protection against identity theft and scams. The best platforms have systems in place to verify charities and fundraising pages. They greatly reduce your vulnerability so you can donate (and fundraise) with ease and peace-of-mind. For example, mycause has a process for detecting and preventing fraudulent activities as well as verifying charities. 

Trusted online fundraising platforms also ensure funds collected for charity are safely and correctly disbursed. mycause has a legal agreement with partner charities to securely collect and disburse funds and ensures all money raised is sent directly to the charity. In most cases, this means we are able to issue tax receipts to your donors. We are also Australian and all data is securely held in Australia.

It’s important to note that not all online fundraising platforms are the same. You should research the reputation of your chosen platform, searching their FAQs page or giving them a quick call to have your questions answered. Only use a fundraising platform if you are happy with the level of protection they provide their users. Using a trusted online fundraising platform is ultimately the best protection against fake charities, fraud, and scams.

It’s important to heed the advice on fake charities and take steps to avoid scams before donating money. Chris Sheehan, who leads NAB’s investigations and fraud portfolio, said once funds had left a victim’s account, it was often difficult to recover them. Consumer advocates are urging the Australian government and our banks to introduce a national code to reimburse fraud victims. However, continued vigilance will be your best defence.