Regulators land on phony veterans charities

by Randy Hutchinson, Better Business Bureau President

Americans are very generous in supporting charities that serve veterans and servicemembers. Unfortunately, con artists exploit their generosity and recent enforcement actions by the FTC and state Attorneys General indicate it’s a big problem.

In July, the FTC, law enforcement officials and charity regulators announced the results of “Operation Donate With Honor.” They took over 100 actions against phony charities that claimed to help homeless and disabled veterans, to provide veterans with employment and mental health counseling, to send care packages to deployed servicemembers, and to provide other forms of assistance.

In announcing the actions, FTC Chairman Joe Simons said, “Americans are grateful for the sacrifices made by those who serve in the U.S. armed forces. Sadly, some con artists prey on that gratitude, using lies and deception to line their own pockets.”

Help the Vets, Inc., collected over $20 million in a four-year period operating under such names as American Disabled Veterans Foundation and Veterans Fighting Breast Cancer. The organization did nothing to help veterans and 95 cents of every dollar donated was spent on fundraising, administrative expenses, and the founder’s salary and benefits.

Operation Troop Aid was based in Tennessee and the Tennessee Attorney General participated in a multi-state settlement with VietNow. Some of the organizations targeted in the enforcement sweep have already ceased operations.

Don’t let the actions of these crooks discourage you from supporting legitimate veterans’ and other charities. The BBB Wise Giving Alliance offers these tips for responding to appeals:

• Watch out for name confusion. Many veterans’ charities include virtually the same words in different order or slightly different form.
• Visit Give.org to check out a charity’s trustworthiness by verifying that it meets the 20 BBB Standards for Charity Accountability. These standards address more than just finances; they also cover charity governance, results reporting, appeal accuracy, and donor privacy. Also, check with your state government’s charity registration agency, usually a division of either the attorney general’s office or secretary of state’s office.
• Be wary of excessive pressure in fundraising. Don’t be pressured to make an immediate on-the-spot donation. And don’t be fooled by their thanks for a previous donation you don’t remember making. It’s a common trick to guilt you into making a donation.
• Don’t assume you know what a veterans organization does based on its name alone. Review the appeal carefully and see if it matches program and financial information appearing on the organization’s website.
• Recognize that telemarketing can be a costly method of fundraising unless carefully managed. If interested in a call on behalf of a veterans’ charity, always check out the organization online before donating.
• Be wary if a charity solicitor asks for donors to send contributions using an unusual transaction method such as wire transfer, gift cards, or pre-paid debit cards. This could be a ruse to enable questionable solicitors to get funds quickly.
• If a veterans’ charity is soliciting for used clothing, cars, furniture and other in-kind gifts, find out how they benefit. Sometimes the charity receives only a small portion of the resale price of the item or may have a contractual arrangement to get a flat fee for every household pick-up, no matter what the contents.