Crowdfunding Scams: If you don’t know them, don’t trust them
Be cautious about giving to individuals on crowdfunding sites, say the FTC, knowing that it is too easy in the age of “social media influencers” to get duped by either a very convincing sob story or, conversely, a charismatic post by a comely and quite vapid virtual socialite.
The best course of action: It’s safest to give to someone you personally know and trust.
When in doubt, do your due diligence. Review the platform’s policies and procedures as not all crowdfunding sites verify postings for help after a disaster.
These schemes beg the question: why are crowdfunding sites such a target for illicit groups in making money, or laundering it?
The answer: few if any countercrime controls.
One of the top fincrime compliance vulnerabilities of crowdfunding sites is that while they solicit money for an individual or purported business venture, they are not subject to formal anti-money laundering rules, like banks and other financial services firms.
At most, some of the larger crowdfunding sites mention that they try to look for and shut down fraudulent campaigns or individuals who have been chastised or blocked in the past from popping back up again.
But there is little evidence to see if that is true or such counter-scam efforts are bearing fruit.
Key tips to avoid falling victim, donating to a crowdfunding scam
It’s important to do your own research before you give because later it might be…
