5 Simple Steps to Spot Crowdfunding Scams
Crowdfunding is popular these days, and for the most part, it’s a good thing, but there will always be scammers who want to take advantage of it. But if you expect crowdfunding to be full of fraudulent campaigns, postings, accounts and donations, you would be mistaken. Crowdfunding platforms have developed a sophisticated system of monitoring fraud and squeezing it out. While a set of protecting actions vary from one platform to another, some of them, like FundRazr, have an in-house team dedicated specifically to prevent fraud.
However, you could do some basic checks before donating to a crowdfunding campaign too. With rising popularity of raising money online, internet scammers become more and more creative. Thus, a simple investigation can be a very effective way to avoid fraud while contributing to a cause or a project.
Though defining crowdfunding fraud can be challenging, take the following steps:
1) Google it!
Google will help you find information on a project and its creator. It doesn’t hurt to google their names, company’s website and creator’s history and see what search results will come up. Some fraudsters replicate a successful campaigns on other platforms in order to confuse supporters and get donations to their fake campaign. But you could easily find it out by googling.
2) Check the validity of creator’s social media accounts
In fact, some people don’t have accounts on Facebook, Twitter, LinkedIn and Google+. However, it’s very important for online fundraising, because that’s how you reach your friends and their friends to get support. Therefore, just check social media accounts of a campaign’s creator, information and pictures it contains, take a look at a number of friends and their interaction with the creator’s activities. Be aware of accounts with fake followers that anyone can easily buy online. Usually for those ones you won’t be able to see any engagement, such as likes, comments and shares on posts or photos of the creator.
3) Use a reverse image search
Some campaign’s creators come up with an idea to steal a photo of a child or dog in need and use it along with a fake story. To avoid being scammed use Google Reverse Image Search. Just upload an image of the campaign and you will see if this image appears somewhere else on the web. It’s a simple and effective step.
4) Lack of updates and communications with contributors
Crowdfunding is a process of co-operation with supporters and their involvement in a cause or project. The more engagement, “thank you” notes and story updates from creators you see on a campaign page, the more legitimate it is. Don’t hesitate to ask questions, read answers to questions from others, wonder about news and progress and make sure that creators’ replies are reasonable and trustworthy.
5) Check the reliability of references and testimonials
If you see any positive recommendations or comments on a campaign page, check the names of people who have given them. Most of them should have at least Facebook or Twitter accounts. It might be a good idea to reach out to them asking their thoughts on this project.
These are the main investigating steps you can take to unravel fraud campaigns. If you see several red flags, contact a support team of crowdfunding platform. Let’s keep the ball rolling and use the crowd wisdom to protect crowdfunding universe from scammers.
I’m looking forward to your suggestions on other steps to spot crowdfunding scams in comments below.