Crowdfunding is the practice of raising money for a person or cause by obtaining donations from a large number of people usually via the internet. People and businesses alike use this fundraising option for everything from paying medical bills to funerals, tech start ups to charity work. Platforms such as GoFundMe and Kickstarter have made it possible for anyone with a compelling story to reach a global audience. Many people use crowdfunding in times of tragedy or illness either for themselves or family/friends. I know when my dad was diagnosed with cancer a family friend set up a GoFundMe for him. While crowdfunding is an effective way of raising money and can help to support many worthy causes, unfortunately a darker side of the practice has emerged: crowdfunding fraud. This occurs when a crowdfunding campaign is created with the intent to deceive. Scammers prey upon the good nature of people, the willingness to help someone in need, to set up fake profiles on popular platforms enticing victims to “donate”. The criminals then use those donations for their own personal gain. Through my research, it seems that the most popular crowdfunding platform is GoFundMe, so today I want to focus on how to avoid scams from this particular fundraiser site.
GoFundMe has become one of the most recognizable platforms worldwide, especially for personal causes. It is hugely popular and really easy to use, which makes it the perfect target for fraud. Here are some reasons it is so frequently used in scams:
📋It is an emotional, high-trust environment. GoFundMe campaigns often center on urgent human needs. You can use this platform to raise money for basically anything, however, causes such as illness, accidents, funerals, or hardship seem to be the most popular reasons for it’s use. Times of hardship and tragedy seem to naturally lower skepticism and make people more likely to donate. When a story seems personal or time sensitive more people are willing to give.
📋There are minimal qualifications to open a GoFundMe. Creating a campaign is fast and easily accessible. While there are verification systems, GoFundMe doesn’t require the same level of vetting as a traditional charity. In fact, that openness is part of the appeal and is also a vulnerability.
📋Viral sharing through social media: Campaigns spread quickly through social media platforms such as Facebook and Instagram. When a user sees a friend share a fundraiser, they are more likely to trust it without verifying the details. People tend to donate or share it on their own pages and scammers exploit this for their personal gain.
📋It is difficult to verify personal claims. Anyone can make up or exaggerate stories to gain sympathy and influence people to give. Medical conditions, hardships, or any other type of emergency can be hard for outsiders to confirm in the moment and may help to influence their decision to donate.
📋Large payout potential: There have been successful campaigns that raised thousands, even millions, of dollars! That definitely attracts fraudsters who are willing to risk getting caught for all that money.
Common scam patters include: fake medical emergencies with stolen pics; exaggerated hardship stories to stretch the truth and garner sympathy; “highjacked” tragedies where the scammer poses as a victim of a real disaster; misused funds from the campaign.
So, with all the phony out there, how do you know your donation is actually being used for good? You don’t have to protect yourself by avoiding generosity, just be intentional with your choices to donate. Avoid becoming a victim by:
- Verifying the organizer
- Look for a connection to the beneficiary
- Examine updates and transparency
- Always cross check the story
- Be cautious with urgency
- Try to spot used images
- Donate within your personal comfort zone
Platforms like GoFundMe are excellent ways to raise money in times of need. The openness and ease of use are attractive to individuals and businesses alike, but those same factors that help to influence honest people to use them is also enticing to fraudsters. While these platforms have experts who work diligently to prevent misuse, fraud will always find a way. Bottom line is the safest way to donate through any crowdfunding campaign regardless of the platform is to give to one organized by people you know and trust. That is the best practice to avoid falling for a scammer and ensuring you are providing aid to someone with a legit need.
Have a safe and fraud free weekend!
Tara Montgomery
Exchange Bank of Alabama
Fraud Specialist
(256) 691-0328
