Monday, June 27th, 2016 - The Connecticut Department of Consumer Protection (DCP) and the Office of the Attorney General are issuing a warning to Connecticut consumers about crowdsourcing scams.

 

Crowdsourcing is a strategy that some people or organizations use to raise or solicit money for a charitable cause. It involves asking a large group of people for money; the larger the asking pool, the more money is likely to be raised.

 

Crowdsourcing has recently taken to the internet in the form of companies like GoFundMe.com and Kickstarter.com. With sites like these, people are able to visit a site and search for a cause that they want to donate to, and then use social networking sites to spread the word about that cause.

 

It is typical of a crowdsourcing company to take a portion of the donated funds (usually 5 to 15 percent). It is important to read the crowdsourcing platform’s terms of use before donating any money or setting up your own page.

 

“We know that some reputable charities can give donors quick, easy access to join their cause by using crowdsourcing sites, but it’s still important for consumers to do research ahead of time, even when making a donation is more convenient,” said Jonathan Harris, Consumer Protection Commissioner.  “We encourage consumers to check a charity's registration information, ask questions of those they’re donating to, and collect any relevant background information before giving, even if it means foregoing donating immediately, and donating later."

 

"Technology has enhanced our lives in many positive ways, but it has also made it very easy for unscrupulous people to take advantage of those seeking to help others or contribute positively to a cause," Attorney General George Jepsen said. "I strongly encourage Connecticut residents who want to contribute to do a little homework before donating to ensure that their money is actually going to support their desired cause."

 

While most crowdsourcing campaigns are run by people with good intentions who will use donated funds in the manner they represented in their solicitations, some campaigns are operated by scammers. Scammers will try to trick people into donating money to a certain cause and then pocket the money that was donated.

 

Make sure that you avoid donating to a scam charity through a crowdsourcing site by following these tips:

 

• Always feel comfortable asking questions regarding where your money is being spent and what projects the charity is working on. Reputable charities will be transparent about their plans no matter how they solicit funds, and won't use high-pressure tactics to get you to donate. Those with good intentions should be able to answer your questions confidently and informatively.

• Never assume that an organization has been previously vetted or checked out by a crowdsourcing site or other entity. It’s important that you do your own research to make sure donating to a specific charity or individual is in your comfort zone.

• If you are a charity receiving donations through a crowdsourcing site, it’s important to disclose how much donation money will be kept by the crowdsourcing site. Encourage donors to research your charity outside of the crowdsourcing site so that they can learn more about your program.

• To search for a more detailed information or history including financial records attached to a charity, check national resources such as Charity Navigator or Guide Star.

• If a charity is actively soliciting in the state of Connecticut, they must be registered with DCP. You can check whether charities are registered by visiting elicense.ct.gov.

 

If you wish to file a complaint regarding a charity actively soliciting in Connecticut, you may contact DCP at dcp.frauds@ct.gov or call 860-713-6100 or 800-842-2649 (Toll Free in CT).

 

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Department of Consumer Protection:
Lora Rae Anderson
lorarae.anderson@ct.gov
8607136019 (office)
8602478711 (cell)

 

Office of the Attorney General:
Jaclyn M. Falkowski
jaclyn.falkowski@ct.gov
860-808-5324 (office)
860-655-3903 (cell)