What is an Online Scam?
An online scam is a fraudulent activity carried out over the Internet by providing incorrect information for the purpose of stealing money or assets from victims. Online scams are one of the biggest threats to businesses and governments around the world as they end up with severe financial losses and mental and emotional harassment of victims.
According to the Consumer Sentinel Network, which is maintained by the Federal Trade Commission of the United States Government, there were 535,000 imposter scams and 167,000 identify theft cases reported, leading to a loss of more than $1.4 billion in 2018. These figures have only increased to $406 million over what was reported in 2017.
While every sector, business and industry have been affected by an online scam, the Sentinel Network calculated the highest media individual losses found to be present in three categories in 2018. These categories are Mortgage Foreclosure Relief and Debt Management, Business and Job Opportunities and Foreign Money Offers and Counterfeit Check Scams.
The ‘Foreign Money Offers‘ category is one of the top three categories that fraudsters use to lure NGOs (and individuals), especially in developing countries, giving them hope of receiving grants against payment of small sums of money.
*Source: Consumer Sentinel Network, Trade Commission, February 2019
While there is some data available about charitable solicitations (where fake charities seek donations online from individuals around the world), the data for NGOs victimized by fraud grant offers is conspicuously missing.
But it is also true that a vast number of small and struggling NGOs especially across Africa, Asia and Latin America have fallen to these scams and have lost hundreds and thousands of dollars.
*Source: Consumer Sentinel Network, Trade Commission, February 2019
Why are NGOs targeted by Fraudsters?
NGOs in developing countries are most vulnerable to these online fraudsters that not only offer false promises of arranging grants but also use fake identities of donor agencies to win their trust.
These fraudsters are quite aware of the fact that there are millions of small and struggling NGOs working in remote areas of Africa, Asia and Latin America with poor access to resources, skills and knowledge. They also know that these NGOs are unable to easily raise funds on their own and are willing to outsource the fundraising work to third parties.
Besides, the fraudsters are clever enough to use the fake identities of renowned international funding agencies and development organizations like the United Nations, the World Bank, Ford Foundation, Bill and Melinda Gates Foundation to name a few and make NGOs believe that their offers are genuine.
Recently, NGOs in Africa have reported cases where certain well-established institutions have been using the name of ‘fundsforNGOs’ to organize workshops, grants or scholarship program to gain instant popularity and support. We had to issue a disclaimer to clarify that fundsforNGOs has nor partnered neither collaborated with any agency to organize any workshop, grants or scholarship program.
It has been found that mostly struggling NGOs fall to their traps because of their desperate need to get money to fund their work without realizing that these offers only cause further losses to them in the long-term.
What are the types of Scams NGOs should be aware of?
- False Promise of Grant Funding or Award to NGOs
This is one of the most popular scams going around the internet. NGOs unexpectedly receive an email or a social media post or a WhatsApp/text message which says that a certain Foundation has selected your organization to offer grant funding and you just need to respond to this email. When gullible NGOs respond back and start a chain of email communication with the fraudster, they end up paying some money with the hope of getting this ‘large’ grant. - Conference Participation
In this case, fraudsters announce that a huge conference is being organized in a foreign country and your NGO has been selected to participate in it. The fraudster promises to cover the entire cost of air travel and accommodation but the conference registration fee needs to be paid by the NGO. - Massive Investment
NGOs also end up falling into the trap of fake investment scheme, though NGOs are not businesses and these investments bear no meaning to their work. Yet, the promise of large amounts of money makes some NGOs respond and even pay for the “service.” - Scholarship or Fellowship Program
This is another fake offer created by online fraudsters targeting students and young professionals with the false promises of giving scholarship or fellowship at a payment of a certain “fee”. - Lottery Winning and Hidden Money
These lottery winning and hidden money scams are popular across different sectors, NGOs also receive information about them and end up becoming a victim. - NGO Jobs and Employment
In this type of online fraud, messages are shared with NGO professionals about fake job offers in large and renowned international agencies such as the UN, the World Bank, IMF against payment of money. - Phishing Scams
These types of sophisticated scams are different from outright offers of grants. Phishing or, more specifically, Spear Phishing is when online fraudsters use a fake identity of a legitimate organization and ask you to provide sensitive information such as your credit or debit card, bank account details etc. to hack them and steal money from them.
How NGOs can identify signs of a scam?
Online fake offers of grants and similar scams are widespread across the NGO sector around the world. With so much information reaching them from all sides, it is often difficult for NGOs to identify the genuine grant offers from the fake ones.
Below, we are providing important tips that NGOs can use to identify whether a piece of certain grant information is genuine or not.
- All Grant Programs have an Application Process. Did you apply for it before getting the Grant?
- If you receive an unexpected email in your inbox, informing that you have been selected to receive a grant or an award by a foreign agency, you should first sit back and think if you really applied for it or did you ever contact this agency.
- All genuine grants, awards, scholarships or fellowship programs have an application process where you need to submit your details and wait for their response – a long and time-consuming process you need to go through before getting considered for a grant.
- No genuine donor agency in the world will ever land up with a financial offer in your email inbox without asking for an application from you. If you have not applied for it, it is clear that you are being targeted by online fraudsters.
- Genuine Donor Agencies will not charge money from you
- Donor agencies will not charge money from NGOs. Please think – Donor agencies are well-funded and well-established institutions existing to provide funding for your work – why would they want to charge money from you? In fact, it is illegal for donor agencies to collect money from their beneficiaries.
- If you receive a grant or scholarship offer and the “grant-maker” tells you that you need to pay some amount of money before you can receive this grant, then it clearly means that it is a fraud. No genuine donor agency will ever ask money from NGOs.
- Check the Message and the Donor Website
The email, post or text message of a fake grant or scholarship has several signs that clearly give the indication that it is a scam.
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- First of all, look out whether your name or the name of your organization has been mentioned in the “grant offer” email message.
- Fraudsters only have email addresses and they send out millions of messages hoping that some of them will respond back and a few of them will end up paying money for them. That is why, they usually address you as “Dear User,” “Dear Member,” “Dear Friend” or “Dear Organization.”
- Fraudsters do not know you until you respond back. You can now analyze this situation very well. If a donor agency does not know you by your name or the name of your organization, why do you think they will provide funding to you?
Source: Google
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- Secondly, these messages are composed and sent through software programs and they are likely to have silly grammatical errors.
- Next, you can check the website of the donor agency. Most donor agencies around the world have websites and these websites are usually SSL-enabled (What is SSL?). You can check out their security certificates.
- Then, as you scan through the webpages of this donor agency, you need to check if they have really announced a grant program that you received in your email inbox. Donor agencies publicly announce grant programs and request proper project proposals from NGOs.
- If you are unable to match the information about the “grant offer” with the one on the donor website, then it may be a scam.
Source: United Nations
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- Lastly, check out the email address from which you received the “grant offer” email message. It will always be a suspicious email address and it will never be associated with the donor agency’s official email address. Even if it is, as in some rare cases, the “Reply-To” email address will always be different, belonging to a different email address.
Source: US Department of Treasury
What to do when you come across a Scam?
The above signs are sufficient for you to understand that a certain piece of information you received is a scam. Below are the steps you need to take if you think you have come across a scam.
- Never Ever respond back to a Scam email
As fraudsters send millions of email messages, they want to make sure if the email addresses they are sending to are real and active. If you respond back even with a “No”, it is evidence enough for them to target you again, another day with a different type of scheme. So, NEVER respond to a scam email. Just delete it. - Report to the Agency whose identity has been misused
If a renowned donor agency’s name or logo has been used by the fraudster in the online scam, then you can quickly contact that agency via its website and inform them. They will not only clarify about the scam but can take legal action against the fraudster. You can also report to fundsforNGOs about any fraud involving our brand name and/or logo - Never Pay Money because the Fraudster is offering a Grant Opportunity
As mentioned earlier, no donor agency will ask money from you against a promised grant. So even if you have responded back to the fraudster, and if he asks for money, then immediately stop your communication with him.
