Do your elderly parents regularly donate to charities, religious groups or community projects? According to the IRS, they could be especially vulnerable to scams and financial abuse.
These fraudulent scam artists use tax incentives and fake charities to cheat charitable people out of hundreds, and sometimes thousands, of dollars. It is essential that you do what you can to protect you and your parents' finances against these criminals.
Can you spot the scams?
Every year, there are more and more scammers using newer, more sophisticated methods to target their victims. Some have access to very legitimate-looking websites, phone numbers and resources. They can imitate existing charities and confuse the average donor.
While it might not be possible to spot every fake charity every time, the IRS has several tips to help you and your loved ones stay safe:
- Look before you leap: Every tax-exempt charity must register with the IRS using a specific code, which the group should list or provide to the public. "Watchdog" sites also keep tabs on a charity's dependability. Researching these could help to avoid scams.
- Protect your information: Be very cautious when donating over the phone or online. Instead of cash, leave a clear paper trail using checks or a secured electronic payment method. This can help you during tax season and help alert authorities to fraudulent activity.
- Let it pass: If you are able, donate outside of "peak season." Lookalike fake charities target donors after a major event or news story to try and capture people's emotions and divided attention. When you make a regularly scheduled donation, you may avoid these traps.
If your parent's estate plan includes a donation to a charity, you may want to check in with this charity every few months or employ someone to do so. If you can find cause for concern before your parent's estate plan is executed, you can help protect them and their assets.
Generous hearts are the unfortunate target of many scams and crimes. With careful research and caution, you can help to avoid becoming a victim.