Crooks Using Crowdfunding to Scam Consumers out of Money

Crooks Using Crowdfunding to Scam Consumers out of Money
Image: Pixabay
June 25, 2014

For years, scammers have exploited people's sympathy by setting up fake charities supposedly to help those in need. But these heartless crooks now have a new way to divert donations to their own pockets.

Crowdfunding takes places when someone sets up a way for people to make donations, usually online, for a cause such as helping someone cover hospital bills after an illness or accident. Although many of these efforts are legitimate, hosting websites like Kickstarter and GoFundMe don't screen those who want to set up a fundraising operation.

These campaigns can be started by people who make up a fake tragic story to swindle you out of your money. Or sometimes the tragic story is real, but the person raising the money is completely unknown to the victims and their families. North Carolina law requires that a charity get permission before fundraising in a person's name.

To avoid getting pulled into an illegitimate crowdfunded project, know who and what you're really donating to BEFORE you donate. Don't get tricked into donating to a fake cause.

If you spot a scam, report it to the North Carolina Attorney General's Office.