NPOs warned of latest ‘COVID-19’ scam, here’s how it plays out

The Department of Social Development is warning members of the public, and the Non-Profit Organisation (NPO) sector, in particular, to remain vigilant of a COVID-19 scam.  

The scam purports to “accredit and convert NPO certificate to NGO (Non-Governmental Organisation) certificate to qualify for international funding worth millions of rands,” the statement read. 

To date, a number of NPOs registered in terms of the NPO Act, have fallen prey to this elaborate scam which seeks to fraudulently gain access to organisations’ finances.

Here’s how the scam works 

According to a statement from the department of social development, the scammers prey on NPOs desperate for funding and charge them R 1 999 for the conversion of their certificates to NGO certificates.

They have re-created a fake NGO certificate in which they ask registered NPOs to submit ID copies of members, their proof of residence, tax exemption letter, bank account, bank confirmation letter and a photo of the NPO Director.

The scammers claim this information is required to convert the current certificate to an NGO certificate in order to be eligible for international funding worth millions.

“We wish to caution the NPO sector to be wary of fraudsters who are taking advantage of the current situation in our country and want to profit through sophisticated scams. The scammers masquerade as members of an agency that convert NPO certificates to NGO certificates and facilitates access to international funding for registered organisations,” said Department of Social Development deputy minister Hendrietta Bogopane-Zulu.

“The Department of Social Development has not contracted any person or agency to convert NPO certificates for international funding and does not intend to do so now or in the future. In fact, there is no such thing as ‘NGO certificate’ as all organisations are registered as NPO in terms of the NPO Act,” she said.  

The department provides information and registers these organisations free of charge and would not make any unsolicited calls, emails, social media posts or texts asking for them to submit information for funding purposes.

Affected NPOs urged to freeze their accounts 

Organisations that have fallen prey to the scam are advised to contact their banks immediately to freeze their accounts and to report such cases to the South African Police Service (SAPS).

The department is warning the sector, in particular, to exercise due diligence and appropriate caution when dealing with any person or institution with whom they have never worked and/or they have never heard of, to avoid falling prey to scams and fraudsters.

In light of the state of the national disaster and the lockdown regulations proclaimed by President Cyril Ramaphosa, the department has extended the deadline for the submission of NPO annual reports from 31 March – 30 June 2020. The extension applies to all organisations registered in terms of the NPO Act.

To comply with the lockdown regulations, the department has suspended all person-person services, including the Help Desk. NPOs that wish to submit their reports or enquire about certain matters can use the online platforms at npoinquiry@dsd.gov.za online www.npo.gov.za or WhatsApp: 066-480-6830/073-099-1383.