Charitable donors, beware this holiday season: not all online crowdfunding campaigns are legitimate, even if they come with a heartbreaking story.
A New Jersey couple and a homeless man are facing charges of conspiracy and theft by deception for allegedly fabricating a story for a viral charity campaign that raised more than $400,000 last year. The couple, Kate McClure and Mark D’Amico, turned themselves in to authorities on Wednesday. The homeless man, Johnny Bobbit Jr., was arrested in Philadelphia on Thursday.
See: How much money should you be giving to charity?
Their campaign webpage, called “Pay It Forward,” has now been taken down, but 2017 news coverage said the couple set up the GoFundMe because they had “made it their mission to get ex-Marine and firefighter Johnny Bobbit, Jr. back on his feet.” According to the GoFundMe page, Bobbit used his last $20 to buy gas for McClure. The couple created the online campaign to repay Bobbit’s kindness and ended up collecting more than $400,000. But authorities now believe the couple and Bobbit conspired together to dupe donors, and that the entire GoFundMe was “predicated on a lie,” Burlington County Prosecutor Scott Coffina said Thursday.
Donors will get refunds
All of the campaign’s donors will receive a full refund, a GoFundMe spokesman told MarketWatch. “While this type of behavior by an individual is extremely rare, it’s unacceptable and clearly has its consequences,” said Bobby Whithorne, GoFundMe’s director of North America communications.
Fraudulent campaigns make up less than one-tenth of 1% of all campaigns on the site, he added. “One fraudulent campaign is one too many, but when it does take place, we take action to protect donors,” Whithorne said.
The fraud was reportedly one of the biggest fake GoFundMe campaigns ever, according to a site that tracks GoFundMe scams, and is one of half a dozen scam GoFundMes that have led to criminal charges in the past several years.
Ask questions like, ‘What exactly will this money be used for?’
Even with the best of intentions, donors have to be careful before giving money to charities — especially those they don’t really know. Campaigns through online giving portals, like GoFundMe and Kickstarter, are growing in popularity, but people should still proceed with caution, and ask a few questions, the Federal Trade Commission warned.
Vetting online campaigns is more difficult than vetting established charities such as the American Red Cross or American Heart Association, said Ashley Post, communications manager at Charity Navigator, a nonprofit that evaluates charitable organizations.
“It’s heartbreaking because a lot of people get taken advantage of,” Post said.
Post suggests that donors be extra vigilant before giving money to online crowdfunding campaigns. Find out where the campaign originated and ask whether family or friends know or are familiar with the cause before giving money, she said. Another tip: Google GOOG, -0.15% the name of the recipient and “complaint,” “review,” “rating,” or “scam,” the FTC suggests.
Sometimes it comes down to a gut check. “If it feels wrong, maybe it is,” Post said. Ask specific questions, including “Why are they raising money?” and “What exactly will this money be used for?” Scammers “make lots of vague and sentimental claims but give no specifics about how your donation will be used,” the FTC warned.
Established charitable organizations won’t usually use crowdfunding platforms, and instead create their own funds on their own websites to raise money.
Don't click on funding links in emails from unknown sources
The Federal Trade Commission also warns donors to find out whether online portals keep any of their contributions for fees, how long it will take for the charity or individual to get the donation and how the donor’s information is shared with the charity (or anyone else). “These details should be clear and easy to find without hunting through fine print,” the Commission said. “If the details are not clear — or if the portal doesn’t give you this information at all — consider taking your donation money elsewhere.”
Donors should also watch out for the online campaigns that claim to be linked to other charities, the American Institute of CPAs said — it’s always safest to donate directly to the charity or individual whenever possible. And don’t click on links in emails or on social media unless you’re sure it’s a reputable source, AICPA said.
Also see: Dueling GoFundMe pages raise more than $500K each for Brett Kavanaugh and Christine Blasey Ford
Watch out for GoFundMe pages that impersonate someone else
Charitable organizations generally have to register with the state and follow IRS rules if they want to solicit tax-deductible donations, whereas online crowdfunding is largely unregulated. GoFundMe uses a verification process and asks campaign creators to state who they are, what they’re raising money for, their relationship to the beneficiaries, how the funds will be spent and how the funds will be delivered.
Still, GoFundMe cautions donors to ask themselves a few questions if they question the validity of the campaign, such as “Does the GoFundMe include intentionally misleading or factually incorrect information?” and “Is the GoFundMe impersonating someone else and/or copying their story? If they suspect a scam, donors can report the scam on the website.
There are many heart-wrenching campaigns online. People start fundraising campaigns for themselves or others in need of medical or financial assistance, who unexpectedly lost loved ones or for those who find themselves in hard times with nowhere else to turn. A Canadian GoFundMe campaign raised more than $7 million in August, ranking among the largest campaigns globally, after a bus crash killed more than a dozen people, including young hockey players, coaches, support staff and broadcasters, and injured 14 more.
In the last year, there have been GoFundMe campaigns devoted to “Gilligan’s Island” actress Dawn Wells, and for U.S. Supreme Court nominee (now justice) Brett Kavanaugh, and Christine Blasey Ford, the woman who testified that she was assaulted by Kavanaugh, to name a few.
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