Phony Donors Prey on Nonprofits

In a man-bites-dog-like story, the Oregon Attorney General warns nonprofits about phony donors who make contributions by credit card, then ask for refunds.Consumers ofter receive warnings about phony nonprofits. Now Oregon Attorney General Ellen Rosenblum is warning nonprofits about phony donors.

So far, she says, Oregon nonprofit officials have caught on to the scheme and avoided any costly losses.

In a "Scam Alert," Rosenblum urges nonprofit officials to be wary of donors that make online contributions, then recontact the nonprofit to say the donation amount was a mistake.

The example Rosenblum included in her alert described an Oregon nonprofit receiving a notice of a credit card contribution for $3,300. When the nonprofit sends an email confirming the contribution using the contact information provided, the phony donor immediately replies that he or she mis-typed the amount, which was supposed to be $300 and asks the charity to return $3,000.

A tipoff is when the phony donor asks to have the amount returned to a different credit card, Rosenblum says.

The attorney general wrote, "This is just one variation of refund fraud perpetrated by scam artists who are typically located overseas. In this particular scheme, the scammer will make a charitable contribution with a stolen credit card and use the nonprofit as a conduit to launder funds into his or her own coffers."

"The crime is particularly harmful because it victimizes both the consumer whose credit card was stolen, as well as nonprofit organizations that rely on donor contributions," she added.

Rosenblum advises donors not to send money via wire transfer, money order or a pre-paid credit card, which provide little recourse in the event of a scam. She also urges nonprofits to exercise vigilance and know the donors who contribute. "If you receive a contribution from an uncommon source or unusual donor, seek out additional information before issuing a refund," she encourages.

Here is a real example of a phony donor communication: