Let Us Prey: How Church Scam Artists Get Away With Millions

10 church scam tricks and 5 golden rules to prevent your trust and compassion from being abused: Internet Scambusters #358

Church scam tricks exploit trust and cost their victims
millions of dollars every year, so much so that one state has
named one variety of this type of crime its number one scam.

Yet by applying some commonsense measures, most of these con
tricks can be avoided — whether you’re a member of a
religious organization or on the receiving end of a bogus
request for help.

In this issue, we highlight the 10 most common types of
religious scams and give you our five golden rules for
avoiding them.

First, we recommend you check out the most popular articles
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On to today’s main topic…

Let Us Prey: How Church Scam Artists Get Away With Millions

The trusting nature of many religious worshippers, and, often,
their fervent wish to help others, have opened the floodgates
to an evil deception — the church scam.

Church scams can happen when members of a congregation, a
church, temple or mosque, or even a whole religious
organization, are fooled into parting with their money either
for a supposedly profitable investment or simply to support an
individual who claims to have fallen on hard times.

Tens of millions of dollars have been plowed by individuals
into hopeless projects that have turned out to be Ponzi
schemes. You can find out more about Ponzi schemes in this article:
The Top 10 Ways
to Avoid Being Sucked into a Ponzi Scheme

Perhaps the most common religious scam is a variation of the
Nigerian scam, which we wrote about in href="http://www.scambusters.org/victims.html">SCAMMED! What We All
Can Learn from These Real-Life Victims (under Foreign

In other religious scams, churches have been left with
thousands of dollars of debt after being hoodwinked into
signing costly leases for equipment they thought was free.

In this issue, we take a look at the most common types of
church scams and offer some advice on how to avoid them.

The affinity church scam

“Affinity” simply means something like “a shared
understanding, interest or belief.” And claiming to share
someone else’s viewpoint is the sneaky cover many church scam
artists use.

Pretending to share their faith lulls members of religious
organizations into thinking a scammer is genuine.

Often claiming some kind of divine guidance, using religious
slogans, or claiming to be raising funds for a religious or
other worthy cause, church scammers invite their new “friends”
to invest in what turns out to be nothing more than a Ponzi
scheme paying for their personal lifestyle.

This is such a huge and common crime that the state of Arizona
just listed affinity scams of this type as its number one scam
for 2009.

And in one recent nationwide religious scam, churchgoers are
said to have lost more than $50 million in a phony gold
bullion scheme, promoted on daily telephone “prayer chains,”
in which they thought they could earn a huge return.

Many affinity church scams involve promises of triple digit
returns or other similarly unbelievable come-ons.

In the bullion case, for example, the amount of precious metal
said to be involved was greater than the gold reserves held by
the United States!

The sob-story church scam

In a way, this religious scam is a variation of the affinity
scam. It just happens at a personal level and usually involves
less money.

A newcomer turns up at church. They may profess to be recently
converted to the faith and claim this has changed their lives.

Sometimes immediately, sometimes over a lengthy period of
time, they tell a story of a struggle against hardship or a
recent tragedy.

Typical examples are stories about needing to travel across
country to reunite with family they haven’t seen for years or
to attend a parent’s funeral, or claims to be suffering from a
terminal illness.

Church funds or contributions from compassionate congregation
members usually appear quickly. And just as fast, the scammer

“Free” or cut-price equipment offers

Recent news reports have highlighted several variations of
this type of church scam, in which religious organizations
sign up to use equipment for what they believe to be little or
no cost.

Typically this may involve computers, photocopiers or other

Sometimes the organizations are told they have to pay upfront
but that their costs will be reimbursed by a sponsor, who
fails to materialize.

Other times, fees and other costs are hidden in the fine print
of an agreement or lease.

And on yet other occasions, churches have replaced equipment
leased to them via a third party (i.e., not the original
supplier or manufacturer).

The third party — the scammer in this case — does not return
the equipment to the supplier or cancel the original lease.
They sell the equipment instead.

In one case, a church with two photocopiers discovered it owed
money on 14 leases!

Other common religious scams

If you belong to a religious organization, here are a few more
scams to beware of:

  • Using a church as a drop-off. The scammer orders equipment
    in the name of a church, then waits for the item to be left on
    the step, knowing no one will be there.

  • Hijacking of the church’s email account, which is then used
    to send out phony distress messages (for example, from the
    pastor) asking for money to be wired.

  • A “Nigerian” scam in which church members are told they are
    entitled to buy cut-price cars or other equipment,
    supplemented by a religious bequest. Again, they have to wire
    cash in advance.

  • “Gifting clubs” — a sort of pyramid scheme, where new
    members contribute money in the hope that they too will get
    cash by recruiting more members. These are illegal. See href="http://www.scambusters.org/cellphonerecords.html">Are Your Home
    and Cell Phone Records Private? for more on gifting clubs.

    In addition, here are three more church scam tricks, this time
    ones crooks use to try to fool the general public:

  • Business and door-to-door collections supposedly on behalf
    of a church or religious group. Or phony church-goers who
    charge in advance for community services, like meals-on-wheels
    that never arrive.

  • Illegal tax avoidance schemes that claim you can set
    yourself up as a church so you can claim charitable status.

  • Cults. This is a whole church scam subject in itself.
    Basically, under the guise of some sort of faith, an
    organization recruits members and convinces them to hand over
    all their possessions.

How to avoid church scams

There are five golden rules for avoiding church scams drawn
from the tips we frequently provide subscribers across all
type of con tricks.

  1. The most common adage applies to affinity and
    equipment-related church scams — if it seems too good to be
    true, it probably is.

  2. Never believe someone is who they say they are, or that
    their claims are true, without independent proof.

  3. Never wire or donate cash unless you are 100% sure who the
    recipient is.

  4. Always read the small print of any agreement you are
    signing. Discuss it with others — don’t rush.

  5. Carefully check out the credentials of any organization you
    are dealing with, whether they’re investment firms or
    equipment suppliers.

There is also some useful guidance on church scams on the
Federal Trade Commission website.

By applying these common sense rules, you can ensure your
church or religious group can safely maintain its spiritual
and social focus.

The church scam artists meanwhile can await their day of
judgment — whether it’s in this world or the next!

Time to close — we’re off to take a walk. See you next week.