MISSISSIPPI STATE -- Mississippi regularly leads the nation in charitable giving, and where there is money, there are people who want to get some of it by illegal or unethical means.

Bobbie Shaffett, family resource management specialist with the Mississippi State University Extension Service, applauded Mississippians for their generosity, but encouraged them to give wisely.

“Always investigate before you invest. Ask to be sent printed information, and then call the Better Business Bureau or the Secretary of State's office to make sure they are a real charity and to find how much of your money is actually going to the charitable purpose,” Shaffett said. “You can make good choices when you have the facts.”

Shaffett spoke during a recent statewide videoconference held in conjunction with Consumer Education Month. She was joined by representatives from the Mississippi Secretary of State's office.

Mark Branning, an examiner in the business regulations and enforcement division of the Mississippi Secretary of State's office, said all charities must register in Mississippi with the Secretary of State's office before they solicit. To find out if a charity is registered, call the Secretary of State's office at (888) 236-6167.

“If someone calls asking for donations, don't be afraid to ask questions,” Branning said. “If they get mad and hang up when you ask questions, good.”

Some people illegally raise funds by not registering with the state or by creating an organization with a name similar to a well-known charity. Donors are duped into believing this organization to be legitimate. Others raise funds for a stated cause, but forward very little of the money collected to that cause.

“A reasonable use of charitable funds requires that at least 65 percent of the funds be spent on charitable expenses,” Branning said. “They do have lights, payroll and other overhead expenses which can legitimately be paid for with charitable giving.”

The Secretary of State produces an annual Report on Charitable Organizations in Mississippi available at no charge to anyone who asks. Among other details, this document lists all the charities registered in the state and the percentage each organizations spends on the cause for which funds were raised. For more information on charities in Mississippi, go online http://www.sos.state.ms.us and click on the Regulations and Enforcement link.

Another way some Mississippians lose their money is through improper pre-need funeral service arrangements. Branning said when purchasing a pre-need funeral service, the person makes all the decisions for their own arrangements, then makes payments to the funeral home over time for what they chose. Unscrupulous businesses may take this opportunity after someone dies to not provide what they purchased.

“Some funeral homes are doing things like not having the casket that was paid for, and telling the family they can buy another one for $2,000 more,” Branning said.

Michael Huggs, chief securities examiner with the Secretary of State's office, said another way scam artists steal money is by calling themselves financial advisors.

“Anyone can call themselves a financial advisor or a retirement planning specialist, investment planner or estate planner,” Huggs said. “A certified financial planner, or CFP, has completed a three-year course of study, passed the certification exam and been given a license. It is a very specific designation and indicates a level of professionalism.”

Huggs said ideally, a financial advisor helps a person make prudent financial decisions based on their own very specific needs.

“In our not-so-perfect world, they may have an agenda or a specific product they are trying to sell,” Huggs said. “No matter what you tell them about your comfort level with risk or the length of time you want to invest, they will say their investment product is perfect for you.”

Huggs encouraged those seeking financial advice to ask some questions up front. Determine how this person is paid, whether by a flat fee or hourly rate for dispensing advice or a commission on the products the investor buys. Also, ask if the person is tied to any products.

“If you go to a Ford dealership looking for a new vehicle and you tell them what your needs are, chances are you will drive away with a Ford product,” Huggs said, saying the same happens when a financial advisor has an incentive to sell a certain product.

Huggs said a recent, popular tactic to lure people into risky investments is to hold free financial seminars, usually at a nice restaurant. A meal is provided and the speaker tells how their investment opportunity is perfect for those in attendance.

“If they get up and ask that any attorneys, regulator or investment professionals leave, put your napkin down and run, don't walk, out of there,” Huggs said.

“Each year, unsuspecting Mississippians are swindled out of their hard-earned dollars by fast-talking, high-pressure salespersons pitching a variety of phony investment schemes,” Shaffett said. “Anyone can become a victim. The techniques practiced by these swindlers are well-rehearsed and often hard to resist, but information is the best protection. Take the time to learn as much as possible about investment options and investment firms before turning over any cash or signing any contracts for services.”