Crowdfunding Scams Based on Truth

Crowdfunding Scams Based on Truth

by Leslie Freeland, September 12, 2016

Crowdfunding websites, like GoFundMe, GiveForward, and, have made it easier than ever to help out a sick friend, support a charitable organization, or provide assistance to a family who’s been left financially hurting because their breadwinner passed away suddenly without any life insurance.

All that’s needed to start a crowdsourced fundraiser is a compelling story, a few nice pictures, and some links to social media sites like Facebook and Twitter. Where, with any luck, the story will ‘go viral’ and attract generous donors from across the country and beyond.

Scammers Turning To Crowdfunding For Fast Cash

There are many successful, real stories about how crowdfunding campaigns have helped children with terminal cancer, impoverished teens, and even homeless pets. Unfortunately, there are also crowdfunding scams.

According to Consumer Reports, con artists are turning to these crowdfunding sites as a source of quick cash. They are preying on unsuspecting strangers with empty promises and lies. While these scams range from fake businesses to products that were never delivered, the most disturbing scams involve stories about people have passed away without any life insurance.

“They Didn’t Have Life Insurance”

Unfortunately, this new generation of online scammers often use real-life tragedies to commit their crimes. In these cases, the actual story about the person, family, or cause that needs financial support is legitimate. However, the people who need the help never actually see any of the money raised during a crowdfunding campaign.

Here’s how this despicable scam usually works:

  • A scammer spots a story in their local news feed about a sudden, and usually tragic, death.
  • They quickly set up a crowdfunding page using a fake name. They often claim to be a close friend of the family, a relative, or a co-worker. They might include details about the deceased person they found in the media and online.
  • The scammer then crafts a compelling story about how the grieving family needs help with funeral costs and/or hospital bills, usually claiming there was no life insurance on the deceased.
  • The scammer may have multiple social media accounts that they use to ‘share’ the crowdsourcing page with as many people as possible.
  • Once the donations roll in, the scammer clears out the account, closes down the crowdsourcing campaign, and disappears with the donations.

Crowdfunding Scams Based on Truth: Profiting From The Pain of Others

One recent example of this exact type of scam involved an 11-year-old Navajo child who was kidnapped and brutally murdered in New Mexico. Over 2,000 people attended her funeral. Then multiple crowdfunding accounts were established to raise funds for the family.

According to the children’s father, many of these crowdfunding accounts belonged to thieves who wanted to take advantage of the anger and grief. These scams only added to the trauma the family had to endure.

Suspect A Scam? Here’s What To Do

If you discover a crowdsourcing page or campaign that looks like a scam based on your family, the editors at GoFraudMe, a website dedicated to tracking fraudulent online fundraising, have this advice for you:

If you or your family suspect someone is illegally raising funds in your name of the name of the deceased, please contact your local police department. Be sure to save the fundraiser link and screenshots as this information tends to disappear!

So while crowdfunding can be a powerful tool to connect people in need with those who want to help out, it can also be an easy target for criminals. As with all things involving money, be sure to do your research before you open your wallet!


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Leslie Freeland

Leslie Freeland

Marketing Communications Coordinator at Asurea
Leslie joined Asurea as the Marketing Communications Coordinator in February 2015. Since then, she has been working closely with insurance professionals to educate the public on the importance of life insurance and protect the public from common scams with informational articles.
Leslie Freeland

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