“Scams prey on the most vulnerable people.” - Dori Zinn Click To Tweet
The pandemic has taken an economic toll on millions of lives. People are struggling, people want to help, and others are looking to take advantage of both. Before panicking about your bills or giving to the latest charitable cause, you need to listen to this episode to make sure your money is going where you think it is.
Our guest today is Dori Zinn. Dori has been a personal finance journalist for more than a decade with work featured in Forbes, Huffington Post, CNET, Yahoo Finance, and more. Her writing covers topics like banking, investing, credit, debt, student loans, personal loans, budgeting, and overall financial literacy. But today, she is talking about charities. Which ones are legitimate and which ones are raising those red flags?
- [0:47] – Dori introduces herself and discusses her background in personal finance journalism. Her work is featured in many different avenues.
- [1:39] – Her interest grew in finance because she was originally very bad at managing her money. She started working on a budget and as she learned more, she decided she wanted to help and educate others.
- [2:58] – Where there is money, there is a scam. People want what others have.
- [3:24] – Where Dori lives in South Florida, scams pop up after hurricanes and other natural disasters. Right now, there are a lot of Covid-19 scams floating around.
- [4:50] – Both Chris and Dori recommend using Charity Navigator to research charities to give to or to check to see if a charity is legitimate. Dori also recommends Great Nonprofits, Guide Star, and Charity Watch as well.
- [6:39] – Dori believes that most people do the best they can, but there are always those who try to take advantage of the system.
- [7:40] – Sometimes the people running a donation charity like GoFundMe are not always the people who need the money. Unless you know the person personally, be cautious and ask questions.
- [8:52] – Dori recommends donating to larger organizations over individual GoFundMe campaigns because the research is easier and their paper trail of how they use the monetary donations is accessible.
- [9:55] – Dori shares an experience with GoFundMe of a friend who created a campaign for a friend. Although Dori didn’t know the person the money was being raised for, she trusted the person raising the money on her behalf.
- [11:50] – Is the charity set up to benefit a cause or a person? Research the charity, first.
- [13:18] – Is your $20 going to the CEO or is actually going to help people on the ground? So pay attention to that.
- [14:26] – Scams prey on the most vulnerable people.
- [15:01] – Ask the questions you know the answer to. If you know the answer to it, a legitimate phone call will know that information, too.
- [16:42] – If Dori receives a call from a bank or credit card company asking for money, she hangs up and calls the number on the back of her cards. Those are the numbers that will reach the right people.
- [17:08] – In some areas, due to Covid-19, most utility companies are stating that they aren’t going to shut off service if a bill is late so if you receive a call stating otherwise, double check your area’s service providers.
- [17:42] – Dori shares a scam surrounding Covid-19 testing kits and vaccines that do not exist.
- [19:10] – If you have someone come to your door claiming they are there for the census, Dori shares tips on how to make sure they are legitimate and how you can avoid a scam.
- [20:08] – Dori and Chris discuss credit repair scams, which is another example of people preying on the most vulnerable.
- [21:25] – In regards to credit repair companies, don’t pay for anything up front. Credit counseling companies will typically fit a fee into your monthly payments.
- [22:40] – Sometimes, credit card companies and banks will work with you if you explain your situation.
- [23:18] – If you can’t verify that a company exists with a simple Google search, that’s certainly a red flag.
- [24:50] – You are the only one who can prove that bad marks should be removed from your credit, so be wary of credit repair companies who can’t actually help you.
- [26:24] – Look for financial professionals that will educate you on how to fix a problem and not make the mistakes again.
- [27:15] – In the US, talking about money problems is very taboo. Most of us come from homes that didn’t talk about money and aren’t educated.
- [28:32] – The best households will talk about money with each other and their children.
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Can you give me a little background about who you are and what you do?
I am a personal finance journalist. I have been working and writing about personal finance for more than a decade. I have bylines in CNET, Forbes, Bankrate, Credit Karma. You might see some of my work in MSN and Yahoo!, some sort of everywhere. I write about all different kinds of personal finance. Sometimes about credit and debt, sometimes it’s a lot about how your identity works with your money.
Was there something that got you particularly interested in finance?
I wasn’t very good at it. When I realized how bad I was with money, my boyfriend at the time, who is now my husband, got me on a budget. Could you believe it? I started working with this website, which is huge now, which is Mint. I realized how much money I was wasting just on very frivolous things. I was like, “If I could do it, other people can do it. Let me help other people.”
I really enjoy the stuff I write about because I really enjoy helping other people. A lot of the time, we don’t know what we don’t know, so if I can just help people know a little bit more, then I feel better. A lot of the personal-finance stuff I write is very basic explainers. My thing is always there are two things you need in life. One is food and the other is money. There is never nothing to write about. There’s always something to write about because money is such a very, very important topic.
It’s definitely one of those topics where there’s money, there are scams.
You’ve got something that people want, they’re going to try to get it from you.
Never not a scam.
Any new scams that you have seen come out in the last couple of months? Obviously, there's a lot of COVID-related stuff.
Tons of COVID scams. Where I live in South Florida, there’s always a charity scam after a natural disaster. There were hurricanes here. We just saw some hurricanes on the coast of Texas and Louisiana. Every time there’s a natural disaster, there are tons of scams that pop up. I would say be mindful of that not just in the summer or fall months like where I am, but also coronavirus-related charity scams.
If you are getting hit up for money through an organization that you’ve never heard of, that just got “created” last week, it’s something to be mindful about. Of course, there are plenty of ways to check out charities. You can check them through Charity Navigator, you can Google them to see if they exist. Find out where their money goes. When you donate, where does your money actually go?
I think that’s really important now more than ever during COVID because we have such limited financial resources. People are still out of work, people are still underemployed, maybe they’re furloughed, maybe they’re working part-time. They don’t really have a lot of extra money, but if they want to help, the last thing you want your money to do is to go to a scam.
Yeah. Charity Navigator is one of my favorite go-to places to refer people to when they’re talking about charities. It’s like, you want to find a charity that has a good reputation, that raises dogs to be service animals, you want to find cats for cat ladies, they need their 45th cat, you
You’ll find it.
Whatever your passion, you’ll find a great charity at Charity Navigator for it.
Yeah, and there are a couple. When I was doing some research for an article, there is Charity Navigator, there was one called GreatNonprofits. You can see GuideStar, which is finding out what a charity is like, like actual information about them, their IRS documents, and their annual reports and stuff like that. And then there’s one called CharityWatch, which is like a watchdog. If somebody reports unethical practices, if they have been investigated, or if they have wasteful spending.
There are a few different ones. If you’re really gung-ho about looking up charities, Charity Navigator, first spot. But if you’re like, “Let me keep digging,” and if you’ve got the time, check out a few others or maybe somebody didn’t have a good experience with Charity Navigator, which is very hard to believe, then maybe they want to try something else.
What do you think about those GoFundMe and the sites that are set up to help individuals with issues? Or maybe they are sometimes for charities, but they often seem to arise when people are in the news and something has happened.
I have this belief that most people are trying to do the best they can. But there are always people that take advantage of the system, whether the system is GoFundMe, whether the system is any sort of donation site where you can easily give money, even from Facebook. There are people that are like, “Oh, let me hop on this bandwagon and see how much I can get from people.” I know that it’s very easy to believe that most are good. I believe most people are good, but you have to be very cautious when you’re taking those steps and just be like, let me hand over some money.
I usually will read every discussion. If there are any videos, make sure they’re legitimate. If you see the person who has created or organized the fundraiser, sometimes it’s not always the person that they’re raising money for. Be a little bit mindful of that. Pay attention to who’s organizing. You can also see if it says on behalf of so-and-so, or this organization, or this person.
If you’ve never heard of the story, pay attention to that. Sometimes, when big stories happen, multiple GoFundMes will start because people just want to help. It’s very nice, but just check them out. Are they both legitimate? If they are both legitimate, maybe put them in contact with each other so they have one. Don’t donate to both, don’t donate to one over the other, check them both out, see which ones are legitimate.
I think it’s still really important to check out bigger organizations over one-offs that pop up. Especially right now, they’re easier to check out their paper trail and the work that they’ve done. If you can, if you want, check out the ones that are legitimate that actually can show off the work that they’ve done.
I know when it comes to charities for individuals, I have a guideline for myself. I don’t give to those things unless I know the person who the money is going to or I know somebody who knows them personally.
You’re like two or three degrees away.
Once or twice removed. If it’s like, “Oh, it’s my aunt’s friend’s cousin’s next door neighbor’s kid.” I’m like, “I just don’t feel comfortable. I don’t know them.” But if it’s like, “Hey, I know this person and it’s their best friend.” I’m like, “OK, I feel good about that.” Or it’s one of my friend’s kids. OK, I feel good about that because I know who the individuals involved actually are or at least trust someone who knows that person or knows the situation.
That brings up a very good point. A few months ago, I had a friend whose neighbor was removed from her home. She had two small kids; she literally had just had her third kid weeks before. She didn’t speak English, but my friend did, so she was coordinating. She’s just like, “She just needs some money if anybody can help out.” I was like, “Well, she knows her personally, she knows that she is out of her house. How can I help her?” It was that once or twice removed situation.
You really have to think about that when you give your money. Where is this dollar going? Who is it going to? How is it split up? With organizations that just pop up out of the blue, you really have to find that. Whether it’s for individuals, whether it’s with organizations, you really have to find out where your dollar is going because just to part with it because you read a Facebook post, it
Yeah. I’m always concerned about those. Who is this entity? If I’m giving money, then how much money is going to the overhead to run the entity?
Which is important, but it’s not the most important.
Correct. Sometimes you hear the CEOs of extremely large charities making a very good living.
A good six figures and you’re like, “Hmm.”
But with the charities bringing in a billion dollars a year, you’re like, “OK, if someone were the CEO of a corporation that was doing a billion dollars a year of revenue, is that kind of comparable? OK, I guess I can understand it.” I’m not a fan of that, but when you see the charity that they bring in a million dollars a year and half of it goes to the CEO, this sounds like it’s really set up to support you and not your cause.
Exactly, and that’s why Charity Navigator is so good for that because you can see where the money goes. I know annual reports are boring for some people, but if you’re really considering giving your money to someone or something, it’s really important to check them out. Unless you do not care about your money—that’s a different story—then fine, give it away. I’ll take some. If you’re not going to check people out, I’ll send my Venmo apparently.
I’m always excited about those charities where the CEO makes $50,000 a year. Okay, the money’s [00:12:40] the cause.
I think CEOs are really important positions to cover, but what about your directors, what about the people on the ground, your grassroots people that are out in the field recruiting, registering people, or are actually helping people, how much are they getting? Because if you’re getting $500,000 and they’re getting $500 a month or whatever, that’s a really big problem.
It’s important to pay the people that are doing work. I think administrative pay is really very important, but as long as it’s broken up in a way that you’re comfortable with, that’s really important. If you’re like, “Oh, the CEO makes $500,000. Yeah, sure, I’ll give to them.” OK, is your $20 going to the CEO, or is it going to actually help people on the ground? Pay attention to that.
Yep, that’s good. Are there other personal finance stuff that people should be worried about? The other day, I got a call…it was a pretty good scam. The caller ID was my electric company. They had forged the caller ID. They called and said, “Hey, your electric bill is past due and the technician is on the way to your house right now. He’s going to be there in 15 minutes to disconnect your power.” I’m like, “What’s my account number?” “I’m sorry, sir, I can’t give that to you.” “Then how do you know you’ve got the right person? Can you give me the last two digits of the account number?” Click.
Yeah. That’s one thing that really stands out. The electric company, water company, utility company, your phone.
Especially now, during COVID, where people might be struggling to make payments on this kind of stuff.
It’s absolutely a thing. It’s so sad because you’re really preying on the most vulnerable people—the people who may actually be behind—and they’re worried about their electricity getting shut off. Maybe their kids just started virtual school. They need the internet and you’re about to shut the internet off. You’re really preying on the absolutely most vulnerable people. You have no heart, one.
Two, there are ways to check it out and you actually named a couple of them. One is like, “Alright, give me my account number,” and they’re like, “I can’t give you that.” “How much am I past due? When was my last…?” Ask the questions you know the answer to. Because if you know the answer, then they should be able to tell you the answer. That is really one little thing. One really, really, really quick thing.
Two, I don’t answer calls, this might be for me. If they leave a message and I’m like, “Oh OK, they left a message. Let me see who they are.” But I will call the number that is provided to me. This is important for utilities, this is important for anybody that’s trying to call you. From your “bank” is call the number that’s provided to you, whether that’s on the back of your card, whether that’s on a billing statement. In Florida, we have FP&L, Florida Power & Light. When you log in to FP&L, do you have a number that you can call? I know that in certain investment accounts, they only give certain customer service numbers to people who have accounts.
You have information. If somebody is calling and saying, “Oh, you need to give us money,” call the number that you get. Be like, “Oh hey, I got this call.” My bank is very notorious. If we call you, it’s not us. They’re straight up.
We’re just not going to call you.
We’re not, and they don’t. I did get a text that said, like, “Can you confirm that these transactions were yours?” I log in and I was like, “These are mine. OK, we’re fine.” They are protective in that way, but I never get called. If somebody calls me saying I owe them money or I’m past due on something, I’m like, OK, thank you. I hang up and I call the number on the back of my card or on a billing statement. Those are the ones where you’ll actually reach a legitimate person. It’s so sad to think that that’s actually happening, but it’s a very real thing.
At least in Southern California, you hear a lot of the power and utility companies have specifically said, during COVID, we will not shut off anybody’s service because of failure to pay through the end of the year, whatever it is. You know if you’re getting a phone call, find out because there may be coverage in your area that the utility company said that, “Yeah, you might be passed due, but we’re not going to shut off your power. Obviously, we want to get paid eventually, but we understand that it doesn’t help anyone for us to shut off your power in the middle of this.”
Yeah. There is another scam that I just read about, which is testing kits. You can get tested for COVID or the ones with the immunity one that you have to pay for—they’re all fake. Pay for this vaccine so we can protect you. There’s no vaccine. I know you’re home. I know you watch the news, I know you read the news. You know there’s no vaccine yet. Those things are one of them.
The census is another one right now. Census is super big. If somebody comes to your door and says they’re from the Census, that’s cool, super important, you can verify if they’re from the Census because they should have a badge. A woman actually came to my door and said she was from the Census, and I knew that she was legitimate because she didn’t ask for personal information that was compromisable. She’s just wanting me to verify my race and the people in my household and the names of the people in my household. I think she asked for my birthdate. She never asked for Social Security Number, she never asked for bank account information. She verified this was the address even though she was standing there.
She’s like, “I’m going to ask you seven questions.” This is fine. I said, okay, you can go up to the census online so you don’t have to have somebody come to your door. But if you don’t and somebody comes to your door, just make sure they’re legitimate. Look at the badge. You can actually search the Census website because they have a staff directory. If somebody gives you their badge and you still don’t believe that they’re a real Census person, you can look up their name. And absolutely don’t give away any compromisable personal information, especially your Social Security Number. If anybody asked for bank account information, they’re stealing your identity. If anybody asked for your mother’s maiden name, they’re stealing your identity. Anything that can help them guess a password should raise every single red flag.
Absolutely. What about credit repair? It’s not something I’m super familiar with. I have to admit, I’m out driving and running an errand. I see a hand-drawn sign on a light post, just like “QUICK CREDIT REPAIR.” I’m like, “Yeah….”
Again, people are preying on the most vulnerable right now because the credit is not great when you’re past due on your bills. If you are late to payment, if you have defaults, your credit score suffers. If you’re trying to borrow money, if you’re trying to take out a credit card, if you’re trying to get on the right track and companies are denying you because of your bad credit score, you might look at a credit repair company. Totally understandable.
I would first look into nonprofit credit counseling agencies. Literally Google that term. You will find the ones that are nonprofits. They’re accredited and they will help you with your credit. Most of the time, they will help you with a payment plan. In some cases, they will negotiate with your creditors for settlement costs, they’ll pay it out for you, and you pay them monthly or whatever payment plan you set up. And they're very, very helpful if you get the legitimate ones.
Don’t pay for anything upfront. Usually, you shouldn’t have to pay for anything upfront. If they do require something upfront, I think that’s a problem because they haven’t really proven that they’ve done anything yet.
If it’s credit counseling agencies, they’ll usually work for a fee with your monthly payment to them. So, depending on your payment setup. If you pay the credit counseling agency $400 a month—a random number—that fee is dispersed to all of the people you owe outstanding money to and then a portion of that goes to pay them.
A lot of times, you just need to get set up on a budget. You’re like, “What do I need to pay off first?” Nonprofit credit counseling agencies are almost always free in that regard. You shouldn’t have to pay for it. But if somebody’s like, “Oh, credit repair, we can fix it, we can get this off.” No, don’t pay anybody to do that.
A lot of times, if you have a bank account, they’ll work with you. Or if you have a credit card, they’ll work with you. If you are behind on payments, you might just need a little bit of a proactive step to be like, “Hey, I lost my job, I’m in between jobs, or I don’t have enough money to make this. How can we set up a system where my credit doesn’t suffer, you don’t charge me late fees?” So on and so forth. Usually, they’ll work with you.
Yep. The thing with credit repair places, if they can’t explain exactly what they’re doing and how they’re doing it, that should be a huge red flag.
Similar red flags as people who call you for personal information. If you can’t verify that the company exists, there’s Google. Google is free. It is free 99. Use it to your advantage. Google everything. Google’s the best solution app. If the company doesn’t exist, obviously a red flag. If you get a phone call from a credit repair company, which could happen, or a text message, like, “Hey, give us a call, we will help you.” Google the number. Where does the number take you?You really have to find out where your money is going. Just to part with it because you read a Facebook post is a waste of money. -Dori Zinn Click To Tweet
If somebody calls you, ask for a callback number. You can always say, “Oh, give me a callback number in case you get disconnected.” This is a fine thing to say, but it’s almost always to say I want to verify that this company exists. It’s used to Google and if you call back and it’s some random company, or you call back and it’s a deadline, red flag everywhere. I would definitely pay attention to those.
Also, the fees are really important. You really shouldn’t be paying up for fees. If anybody promises you, like, “Oh, we’ll remove these points in your credit report,” you should really pay attention to that because that almost always can happen. You can get things removed from your credit report. You can get things removed from your credit report. If they’re bad, you have to prove that they’re bad marks. It’s really not something that a fake credit reporting agency can do.
You have proof that you made your payment on time but the credit card company is saying that payment was late, that’s something you can already—
They took your money. That’s even more so. If you paid somebody to do it and you’re still not being involved.
No. There are derogatory lines on your credit and you know it’s because, “Look, I know I made that payment on time. I can prove I made that payment on time.” That’s fairly easy to dispute with the credit reporting agencies.
The three major credit bureaus—Experian, Equifax, and TransUnion—will remove things that you can prove you either didn’t do that are false, maybe that aren’t you. Maybe if you have the same name as somebody and maybe you guys live in the same city. It might be easy to get something on your report that’s somebody else’s mistake. As long as you can prove that it wasn’t you, then that’s your step.
But it’s better to DIY. Don’t pay somebody else to do it. If you do need help, there are legitimate companies out there—the nonprofit credit counseling agencies—that will help you, that care about you. Please don’t fall for the ones that just want your money.
Look for the people who are going to train you, educate you on how not to make the same mistakes, that sort of thing?
Absolutely. Those are really important steps because if you just give your money to somebody, they take it and you have no idea if your money went to the right place. Did you learn anything? It’s really important to sit down with financial professionals and say, “OK, how do I get better? This is the money coming in, these are all my bills, these are the necessities, help me figure this out.” You can talk to a credit counseling agency and talk to a financial coach. You can talk to your bank, you can talk to a planner. Some of those require money, some of those don’t. Sometimes you just need to talk about money with your partner, with your family. Sometimes just talking it out rather than letting your bills pile up is a good step.
I know. At least in the US and probably elsewhere talking about money is this taboo. Unless you’re going around and saying, look how much I have. Aside from that, talking about money problems is very taboo in the US.
Very. I think it’s getting better because I know when I grew up, we didn’t talk about money. My family didn’t talk about money. Earlier, when I told you here like, how did you get into it? Well, I didn’t know how to deal with my money. That comes directly from growing up in a home that doesn’t talk about money. Even if you talk about how much money you don’t have, you still are talking about money, which is an important thing.
If you’re like, “Hey, let’s go over some things.” I know in my house, we talk about money constantly. “Hey, did you know that this bill is coming up?” “Yep, I’ve got it on my calendar.” “Yep, it’s autopay.” Autopay is the best lifesaver. You set up autopay, you don’t have to worry about it unless your card closes or something like that. You really don’t have to worry about it. Simple communication will go a very long way.
That’s one of the things my wife and I talk about consistently about our finances. Where we’re at, how we’re doing.
The best households will talk about money. I know it’s hard because, again, you don’t know what you don’t know. But if you are like, “I don’t know, your next sentence should be, let me find out.”
Let’s figure this out. Let’s find out how to do this or let’s find out what it is. Maybe we know someone who’s really good at this who can give us some insight.
Exactly. That’s such an important thing because the second you talk about it, it’s out in the universe. If you do, that’s something you would do on a normal basis. “Oh, I need a budget, do you know a guy?” Your community is there for so many purposes. It’s really important to tap into them when you need them.If you don’t know somebody that can help you, maybe somebody else knows somebody that can help you. -Dori Zinn, Personal Finance Journalist Click To Tweet
That’s really good. Is there any parting advice that you would have for our listeners today on either red flags that you should watch out for, or things they are probably not doing they should start doing with respect to finances?
I think we had mentioned this about getting a password manager. They will save you time, energy, headaches, heartaches, so many things. Whether you’re looking up charity scams, whether you’re looking up investment scams, whether you’re looking up identity theft, keep in mind, I know we talked about you want to believe everybody has a good heart—most people do—but there are still some people out to get money. Just about them. Literally, just go through it. We talked about Charity Navigator, we talked about a free Google. Google is free until Google is not free, which hopefully is never.
If people want to follow you on social media or read about what you’re writing, how do they find you?
You can find me on Twitter @dorizinn.