Crowdsourcing is a way for charities and public interest causes to quickly raise money. Companies like GoFundMe and Kickstarter have been game-changers, allowing groups to quickly raise needed cash.
But like any good thing, scammers have figured out how to exploit it. By setting up a bogus campaign based on a lie, a scammer can quickly raise thousands of dollars from well-intentioned people, and pocket all of it.
"Technology has enhanced our lives in many positive ways, but it has also made it very easy for unscrupulous people to take advantage of those seeking to help others or contribute positively to a cause," said Connecticut Attorney General George Jepsen.
Jepsen recently urged consumers in his state to do some homework about a campaign before supporting it financially.
Jonathan Harris, Connecticut's Consumer Protection Commissioner, says the basic first step is to check a charity's registration information. Scammers usually don't bother to register.
Ask plenty of questions if it is an unfamiliar cause, and use a search engine to research the campaign or the organization. If it is a scam, chances are there will be some warnings about it online.
“Collect any relevant background information before giving, even if it means foregoing donating immediately, and donating later," Harris said.
Remember, a reputable charity will be transparent about its plans and will not use high-pressure tactics to solicit a donation. If you have questions, you deserve and should expect honest answers.
It would be a mistake to assume that an organization running a funding campaign has been vetted. You need to do your own research and feel completely comfortable before giving.
Here's a tip for organizations running a crowdsourcing campaign: Jepsen says you should disclose up front how much of the donation will be retained by the crowdsourcing site. Also, encourage donors to learn more about your organization but to do their research outside of the crowdsourcing site.