Willingness to Give Fuels Efforts to Take

Within hours of this week’s terrorist attacks, the dark side of e-commerce went into full swing in unsolicited e-mails--also known as spam--sent out by people making unsubstantiated claims that they were collecting relief funds.

Sterling Time Co. of Hollywood, Fla., offered the sale of a “commemorative” prepaid phone card with 10% of proceeds going to “families and victims” of the attacks. How do those who buy a card know a donation will be made?

“I kind of leave that up to our PR director,” said company President Ron Schmidt. He said the relief funds will go to the American Red Cross.

Unsolicited e-mail is the wrong method to generate charity funds, said Tom Geller, head of the spam-fighting SpamCon Foundation of San Francisco.

“If someone you don’t know is sending you e-mail, you should always be wary,” Geller said. He noted that the Sterling Time e-mail had an invalid return address copied from a nonprofit organization.

Schmidt said the message was sent out by an agency that handles the company’s e-mail promotions.

Numerous spam solicitors said they were collecting for the Red Cross. But the organization’s director of online media, Philip J. Zepeda, issued a statement Thursday warning potential donors to be wary of “Web sites soliciting donations, allegedly on our behalf.”

Zepeda asked donors instead to visit the organization’s site at https://www.redcross.org/donate/donation-form.asp or its three online partners: Amazon, AOL and Yahoo.

Another source of such spam was the Hellberg Institute of Laurel, Md. “I am tired of feeling powerless in tragedies such as this, and I need to do something,” said the e-mail. “Maybe you feel like me and want to do something, too.”

The message went on to say that donations would be matched by the institute. But it’s not that simple. The site, owned by Jill Hellberg, operates a company called “Moneygate” that promises to turn a few hundred dollars into millions in a matter of weeks.

“It’s a matrix pyramid way to make money,” said Hellberg, who claimed that the method is legal even though she said it has similarities to a pyramid scheme and that the “matrix” has no outside income to provide investors with returns. “It works more like Social Security, paying people at the top of the pyramid from those coming in,” she said. “The ones who come in later eventually get their returns.”

Hellberg said she had collected about $600 so far for disaster relief. She planned to put it into the “matrix.” “With just $600, we will probably be able to make $2,700,018 in approximately 12 weeks,” she said.

She could offer no guarantees that any funds from the venture will go to charities.

Scambusters, an online publication that investigates unsolicited e-mail, has a philosophy about such fund-raising. “If it’s spam, it’s a scam,” said spokesman Jim Lanford. “I’m sure there’s probably well-meaning people out there collecting funds for relief, but if you answer spam, you don’t really know. Why not just go to a site you have actually heard of like the Red Cross or Amazon?”

Even established online merchants tried to capitalize on the attacks and on charitable impulses.

For example, the day after the carnage, GiantSavings.com plastered the Internet with e-mails titled, “Like the rest of the world, we are shocked and dismayed. . . .” The messages, which exhorted readers to “do your part--Help Now,” offered two electronic facial-hair removers and eight other devices for sale.

“We ask for your help in raising funds for the relief efforts,” the e-mail said. “Partial proceeds go to the American Red Cross.”

The unsolicited mailing drew outrage, prompting the chagrined company to send an apologetic follow-up the next day. “We had no intention of exploiting this disaster which has hit us so close to home,” it said, adding that the company was “just trying to make a difference.”

James Borzilleri, founder and chief executive of Free Domain for Life in Irvine, said his company sent out 2 million e-mails Wednesday pledging to donate $25 to the Red Cross for every customer that signs up for Internet hosting. He said he got “a couple hundred” customers from his solicitation.

To prove that the money would go to the Red Cross, he said he would post a photo of the check on his Web site.

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Making It Count

Before donating to charities, take precautions to ensure that the money will go where it’s needed.

* Don’t give cash. Legitimate charities will take a check.

* Don’t give credit card, bank account or personal information to telemarketers. If you want to give, initiate the call.

* Don’t succumb to Internet appeals. Traditional frauds have gone electronic in recent years, giving con artists easy access to thousands of potential victims.

* Don’t give in to pressure. Anyone who can’t wait for a donation while you check out his or her organization is likely to be a crook.

* Expect specific information. Ask what kind of relief this organization is going to provide. Don’t give to a vague appeal.

* Check out the charity with national, state and local authorities. Established charities register with the Internal Revenue Service. You can search for specific nonprofit organizations on the IRS web site at www.irs.gov.

* Beware of newly formed organizations. If the charity is new, you may have to rely on your relationship with the company or sponsor of the organization to determine whether you trust the group.

* Report abuses to the nearest Better Business Bureau and the state attorney general’s office. Both are listed in local phone directories. You can also report abuses to the National Fraud Information Center at 1-800-876-7060. NFIC also has a Web-based complaint form at www.fraud.org.

* Do give. Needs will be great both now and in the months to come, experts agree.

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To find more information about how to check out charities on the web, go to either www.give.org or www.charitywatch.org.

Researched by KATHY KRISTOF/Los Angeles Times