Crowdfunding sites warn to watch out for scammers

ALBANY, N.Y. (NEWS10) – Some of the fastest growing money makers in the world right now are crowdfunding sites, but how do you know the site you’re giving money to is legit?

When a fire broke out at a Colonie home in December 2014, paramedic Dave Plouff was at the fire house.

“And I said to my partner from overnight, ‘I’ve got this horrible feeling it’s my house,’” he said.

Plouff raced back home only to find his house and everything he owned had gone up in flames. His friend Danny Murdock heard the news and tried to think of a way to help.

“Where do you even start when something like that happens,” he wondered.

Murdock turned to GoFundMe, a crowdfunding site where you tell your story and ask people for help. Within hours, Plouff’s page exploded on social media.

“I think the actually link to the GoFundMe page got shared over 17,000 times,” Murdock said.

The page raised just over $52,000.

“It was, it was pretty overwhelming,” Plouff said.

But it’s not just stories of heartache on crowdfunding sites.

Cody’s Cozy Pals in Latham set up a page to raise money for a new building. Owner Cody Wasial said she’s only received positive feedback from her GoFundMe page.

“No, people are really into helping,” she said. “Once they understand the story, the situation we were put into and why, and I can kind of explain why a business would be looking for help. People are like, ‘Oh, that makes sense,’ and then they’re more than happy to help out.”

Crowdfunding sites cover a variety of causes and dreams, including everything from a robot that draws pancakes to kids who want to ride bikes down the Mississippi River and want to eat eggs all day.

The pages are filled with strangers asking other strangers to fund their dreams.

But is it really all done for free?

“I think that people are naïve if they think that the crowd or that the sites aren’t making money,” Marty Hardin said.

A closer look at GoFundMe shows the site takes an 8 percent cut from every donation. Kickstarter does the same.

GoFundMe alone sees 10,000 new pages set up every day. But the pages are not monitored for false accounts. Several stories have been reported where people opened their hearts and wallets only to be taken advantage of.

GoFundMe would not go on camera but sent the following statement to NEWS10 ABC:

“With millions of campaigns, it’s not feasible for GoFundMe to investigate the claims stated by each campaign. We must insist that all potential donors follow the advice stated on each and every GoFundMe campaign: Only donate to people you personally know and trust.”

Ultimately, it is up to the giver to trust that a crowdfunding campaign is honest because for the ones that are authentic, the people appreciate the help.

“I’m grateful, and I want to be judicious in properly spending this,” Plouff said.

For those who receive a GoFundMe check, most do not have to pay taxes on the money because it is considered a lot of small donations.

If a campaign is found to be fraudulent, there is a paper trail, and GoFundMe has been successful in the past in going after people; however, there is no guarantee of getting money back.

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