Protect Yourself Against
In June 2015, the Federal Trade Commission settled its fi rst case involving
a project or venture that involves raising funds from numerous donors,
typically through online platforms. Since that fi rst case, many crowdfunding
remain vigilant before donating to causes via crowdfunding campaigns.
Many crowdfunding efforts are legitimate. However, consumers should
still take a cautious approach and exercise due diligence before donating
to such ventures.
• Confi rm credentials prior to donating. Consumer Reports notes that
crowdfunding sites verify that page creators have Facebook pages. However,
the existence of those pages alone does not mean a crowdfunding
effort is legitimate. In addition, the Better Business Bureau® notes that
some crowdfunding platforms do a better job of vetting projects and
postings than others. When visiting a creator’s Facebook page, look for
potential red fl ags. A page with a limited history that seems to have been
created right before the crowdfunding effort was started is a red fl ag.
• Learn more about the creator. A legitimate crowdfunding effort that’s
worthy of your donation should be transparent. Creators should be forthcoming
no experience is not necessarily a sign of a potential scam, but donors
may want to support operations that have the best chance at being successful,
so inexperience on the part of the creator should not be downplayed.
• Beware of emotional appeals. The BBB notes that scammers often rely
on emotional appeals, and these appeals imply a sense of urgency indicating
appeals and conduct their due diligence even if the page says the situation
• Donate via specialized crowdfunding websites. The BBB notes that
some crowdfunding sites are dedicated to specifi c types of fundraising
efforts, such as medical funding or projects focused on raising money for
education. According to the BBB, these sites are more likely to sniff out
scams than general crowdfunding sites that may have trouble keeping up
with the volume of new efforts and pages posted each day.
Crowdfunding can be a great way to raise money for a good cause. But
donors also must be diligent when vetting crowdfunding efforts to ensure
such projects are legitimate.
crowdfunding, a way for individuals and businesses to fi nance
scams have been uncovered and prosecuted, though donors must
about their backgrounds and their expertise in the fi eld. Little or
money is needed right away. Donors should be wary of such
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