Shaw Capital Management Headlines: Shaw Capital Scam Info: Fraud fears make B.C. residents less likely to give to charities

By Gillian Shaw, Vancouver Sun February 25, 2011

The aftershocks had barely settled in the Christchurch earthquake before the online charity scams started appearing on the Internet and in people’s email inboxes.

Such high-profile online scams are fuelling fears of fraud, with more than 50 per cent of Canadians saying they are less likely to give money to charities due to concerns about fraud, according to a survey released Thursday.

But the reality is that online schemes are a drop in the bucket compared with more complicated ones involving charitable tax schemes and bogus charity receipts, says Toronto lawyer Mark Blumberg, who specializes in nonprofit and charity law.

“The fact that Canadians are more worried is largely related to media coverage,” Blumberg said of the Angus Reid poll, conducted for Capital One.

The survey found that 58 per cent of British Columbians are somewhat or very concerned about being the victim of charity fraud -a fear shared by 65 per cent of all Canadians. Although that’s up from 51 per cent of British Columbians in November 2009, Blumberg said charitable fraud has declined.

“The No. 1 fraud over the last seven years were charity gifting tax schemes,” he said.

In such schemes, a taxpayer puts up an amount, for example $1,000, and gets a charitable tax receipt for $5,000. But when Canada Revenue Agency catches up with it, taxpayers find themselves not only losing the $5,000 deduction and the $1,000 they shelled out to get it, but even more in interest, penalties and the cost of a protracted tax battle.

The survey found that 41 per cent of donors don’t take steps to ensure a charity is registered, including checking for ID or visiting a charity’s website before making a donation. And up to 22 per cent of Canadians say they prefer to donate online.

The statistics aren’t lost on cybercriminals who prey on people’s sympathetic reaction to world disasters.

“Everybody in the world today has an email address,” said Gerry Egan, director of product management for Symantec, an Internet and computer security company. Egan warns users not to click on links in emails purporting to be from charitable organizations. Instead, if you want to donate, go directly to a website that you know to be the one of the charity you are seeking. Even that can be fraught with problems, though.

Cybercriminals capitalize on world disasters, “poisoning” search engine results with links to fraudulent websites

“I don’t want to be a scaremonger, but you have to be somewhat suspicious,” he said.

gshaw@vancouversun.com

Read Gillian Shaw’s blog at www. vancouversun.com/digitallife

© Copyright (c) The Vancouver Sun

The aftershocks had barely settled in the Christchurch earthquake before the online charity scams started appearing on the Internet and in people’s email inboxes.
Such high-profile online scams are fuelling fears of fraud, with more than 50 per cent of Canadians saying they are less likely to give money to charities due to concerns about fraud, according to a survey released Thursday.
But the reality is that online schemes are a drop in the bucket compared with more complicated ones involving charitable tax schemes and bogus charity receipts, says Toronto lawyer Mark Blumberg, who specializes in nonprofit and charity law.
“The fact that Canadians are more worried is largely related to media coverage,” Blumberg said of the Angus Reid poll, conducted for Capital One.
The survey found that 58 per cent of British Columbians are somewhat or very concerned about being the victim of charity fraud -a fear shared by 65 per cent of all Canadians. Although that’s up from 51 per cent of British Columbians in November 2009, Blumberg said charitable fraud has declined.
“The No. 1 fraud over the last seven years were charity gifting tax schemes,” he said.
In such schemes, a taxpayer puts up an amount, for example $1,000, and gets a charitable tax receipt for $5,000. But when Canada Revenue Agency catches up with it, taxpayers find themselves not only losing the $5,000 deduction and the $1,000 they shelled out to get it, but even more in interest, penalties and the cost of a protracted tax battle.
The survey found that 41 per cent of donors don’t take steps to ensure a charity is registered, including checking for ID or visiting a charity’s website before making a donation. And up to 22 per cent of Canadians say they prefer to donate online.
The statistics aren’t lost on cybercriminals who prey on people’s sympathetic reaction to world disasters.
“Everybody in the world today has an email address,” said Gerry Egan, director of product management for Symantec, an Internet and computer security company. Egan warns users not to click on links in emails purporting to be from charitable organizations. Instead, if you want to donate, go directly to a website that you know to be the one of the charity you are seeking. Even that can be fraught with problems, though.
Cybercriminals capitalize on world disasters, “poisoning” search engine results with links to fraudulent websites
“I don’t want to be a scaremonger, but you have to be somewhat suspicious,” he said.
gshaw@vancouversun.com
Read Gillian Shaw’s blog at www. vancouversun.com/digitallife
© Copyright (c) The Vancouver Sun