Holiday Scams In Disguise: What To Watch Out For When Donating Online

Scammers lurk around acts of generosity year-round, but the holiday season—with its boost in giving and heightened emotions—is their prime hunting ground.

Consider this: authorities recently dismantled a massive telefunding scam involving 1.3 billion deceptive donation calls that netted over $110 million from unsuspecting donors, according to the Federal Trade Commission.

Meanwhile, research from Cornell University revealed that on social media alone, over 800 fraudulent accounts run donation scams, directing victims to fake fundraisers on platforms like Facebook, X, and Instagram.

For small businesses, one careless charitable donation can lead to financial loss and also link your brand to fraudulent activity, tarnishing your reputation and eroding trust among clients, partners, and your community.

Learn how to thoroughly vet fundraisers, recognize warning signs, and safeguard your business and goodwill this holiday season.

How to Vet Fundraisers Before Donating

A trustworthy fundraiser will provide clear answers to these key questions:

• Who is organizing the fundraiser, and what is their relationship to the beneficiary?
• What is the exact use of the funds and the anticipated timeline?
• Who manages withdrawals, and is there a transparent process ensuring funds reach the intended recipient?
• Do close associates such as family and friends publicly endorse the campaign?

If any information is unclear or incomplete, request clarification. Evasive responses or silence are significant red flags.

Warning Signs of Potential Scams

Be cautious and investigate further if you observe:

• False or misleading information presented on the fundraiser page.
• Delayed or inconsistent use of funds for the stated cause.
• Impersonation of individuals or plagiarized fundraising stories.
• Overly polished or emotionally manipulative narratives that feel too perfect.

If multiple red flags appear, report the fundraiser and refrain from donating.

Evaluating Charities Beyond Crowdfunding

Even well-known charities can have questionable practices. Key indicators to verify include:

• Transparent program details, financial statements, and annual reports.
• Clear disclosure of how donations distribute between programs and administrative costs.
• Search results for the charity name showing words like "fraud," "scam," or "complaints."

Absence of transparency or negative feedback should prompt caution.

Common Tactics Used by Charity Scammers

Be alert for:

• Requests to donate via gift cards, wire transfers, or cryptocurrency instead of credit cards or checks.
• Websites lacking https encryption (no "s" at the end), indicating insecure data handling.
• Pressure to donate immediately, creating false urgency to bypass careful thought.
• Claims that you have already pledged or donated without your recollection—always verify before paying.

Remember, scammers can create credible-looking websites and persuasive headlines that hide malicious intent.

The Importance of This for Your Business

When your business donates—publicly or privately—that action becomes part of your brand identity. A donation tied to a scam, even unknowingly, can entangle your brand in fraudulent activities.

Moreover, the tactics fraudsters use in charity scams—like urgency, impersonation, and fake websites—are also common in phishing, invoice fraud, and wire transfer scams targeting businesses. Training your team to recognize fake fundraisers equips them to identify fraudulent schemes across the board.

Protecting Your Business and Goodwill

Follow these strategies to ensure your charitable giving is secure and effective:

1. Establish a Donation Policy: Set clear guidelines on how and where your company donates, including approval procedures.
2. Educate Your Employees: Train your team to recognize fake fundraisers and verify authenticity before donating under the company name.
3. Use Reliable Channels: Make donations directly through official charity websites, avoiding links from unsolicited emails or social media.
4. Maintain Transparency: If your business publicizes charitable contributions, verify the legitimacy of the supported charities.
5. Monitor Donations: Track how your contributions are used, as many charities publish impact reports.

Celebrate a Generous, Risk-Free Holiday Season

The holiday season is a special time for giving back, not regretting misplaced generosity. By implementing smart policies and due diligence, you protect your resources and your brand's reputation.

Want your team equipped to spot scams—from fake fundraisers to phishing emails and fraudulent payment requests?

Contact us at 973-439-0306 or click here to schedule your free 10-Minute Discovery Call today.

Because the greatest gift you can give your business and community is unshakable trust that lasts.