I really hate to break it to you, but as amazing as crowdfunding is for helping new technology, design, and creative projects secure financing and see the light of day, there are also some ugly aspects to the industry.
Projects aren’t always as they appear. Backers can become disgruntled. Creators can get ripped off.
Unfortunately, like with most marketplaces, scams do occasionally occur. But don’t worry!
I’ve put together a few ways that you can report and identify scams before they take on a life of their own. I hope these are helpful and if you haven’t yet, be sure to also look into some of the warning signs we’ve identified when looking through crowdfunding projects.
1. Google the project and the creator
This is the simplest way that you can prevent being sucked into a scam.
Before backing a project or paying a marketing company, look up what others have said about them on the web.
If this creator or project has a history of nefarious actions, you’ll be likely to find it.
Should there be any uncertainty about the delivery of a product and other creators have taken to message boards or third party websites to voice their concerns, then you should forward those links to the project creator.
Any reasonable and legitimate creator will take the time to address these concerns. Sometimes, the influence of a third party website is enough to get them to step up their game and begin to improve their customer relations.
2. Pinpoint unrealistic promises
Unrealistic promises are usually an indication of one of two things:
- The creator hasn’t correctly identified the costs of fulfilling their rewards or is overstating the value of the product.
- The promise is too good to be true and the project is preying on your imagination or the hopes of what it could do or be.
Once you’ve identified a possible flaw with the campaign, bring it to light in the comments section (you can pledge $1 to comment) or through a direct message so that the creator can clear it up.
If they don’t reply or shy away from answering, it might be a good indication that the project isn’t all that it appears. Thankfully, some regulators have been cracking down on campaigns that don’t deliver without good reason.
3. Verify need-based campaigns
Need-based campaigns are typically on GoFundMe or other personal fundraising websites. The creator might be asking for help with medical bills, unexpected costs, or a horrible accident.
It’s disgusting, but some people do take advantage of the emotions around these types of events to scam donors.
Unless it’s one of your close friends, before donating money to a stranger’s cause-related campaign, do your best to verify that the event actually happened and that all of the funds will go to the actual cause.
4. Look into other backers
Sometimes, a campaign will pay for backers or supporters to create the illusion that their project is trusted by others and that their product or cause is popular.
These gigs are offered on Fiverr and other sites, like the example below.
By having “social proof” it might be easier for a scammer to pull the wool over your eyes and deceive you to part with your hard-earned dollars.
Take a second to check out the others people that have commented and backed their project to see if there are any irregularities.
5. Search product images
Another tactic that some creators have used to deceive backers has been to take products from Alibaba and use a crowdfunding platform as an ecommerce store (like this one or this one).
Before backing a project, do a quick google search of any images that the creator has uploaded to see if there are corresponding images on Alibaba or other sites.
If the product is questionable, you can also always rely on the power of crowdsourcing and post it on the Kickstarter subreddit to see if anyone else recognizes it elsewhere on the web.
6. Report it
Finally, if you think you’ve found a scam, report it! Here are a few places that you can report it:
- The platform’s customer support email
- Kickscammed
- Gizmodo
- KickstarterForum
- CrowdfundingForum
- Ripoff Report
I hope that some of these tips help weed out some of the scammy projects or companies while you’re navigating the crowdfunding waters. I’d love to hear any techniques that you’ve come across to identify fraudulent projects below.
