Car Donation Scams
It’s a sad state of affairs when you can’t even trust a charity looking for donations and help. It has come to this point because too many people are taking advantage of others’ generosity. Some people set up charities and solicit money and donations only to make a profit for their own pocket. Other times, the middle-man will claim such an outrageous amount of fund-raising expenses that there is hardly anything left for the actual charity! It’s unfortunate that we are hearing more and more about car donation scams and the number of incidents seems to be increasing.
So how do you know if you are being taken advantage of? Remember to keep the following tips in mind before any transaction is made:
- The best option is to go directly to the charity itself (if the charity has an office in your city) in order to avoid the middle-man
- Many people who have been the victims of charity scams report that the name of the charity sounded authentic or exactly like a charity they had previously heard about
- Ask as many questions you can think of! If the charity is legit, they won’t mind taking the time to answer your questions. Make sure to ask how much of your donation actually goes to the charity in question
- Ask for IRS form 990 which gives a detailed breakdown on charities’ expenses and cost
- If the charity refuses to give you any information, it’s time to look for another reputable charity
Car donation scams happen way too often. You read about them in the paper or hear about them on the news.
In Boston, a lawsuit was filed against the owner of The New England Kids Network (NEKN), a for-profit company. Laws were violated concerning charitable solicitations and consumer protection. According to reports, NEKN earned more than $100,000 from car donations collected from 1999-2001. An estimated 1200 cars were donated between January and June 2000. NEKN gave about 30% of the proceeds to a local charity and the rest was calculated as profit.
More recently, a woman in St. Louis who was operating a fake car donation program was found guilty on five counts of felony consumer fraud. The woman advertised in newspapers, asking people to donate their cars to the KEYS Project. She led people to believe their cars would be fixed and given to those in need (including people who needed a car to get to work and cancer patients who needed transportation to the doctor's office).