Scammers are naturally drawn to any type of venture that provides them an opportunity to do what they do best—relieve other people of their hard-earned cash. Crowdfunding attracts scammers like bees to honey for just that reason.
Crowdfunding can be a great avenue for creators to get the funding needed to make their products or projects become a reality, the truth is that there are unscrupulous folks behind many crowdfunding campaigns. So, how can you avoid scammers posing as hopeful entrepreneurs? The tips that follow—all of which involve research (and more research)–can help you avoid getting burned by giving the campaigns that interest you a thorough sniff test.
Vet the Campaign Organizer
It can’t be overemphasized that you must vet the organizer of any crowdfunding campaign prior to participating. Research the creator of the campaign thoroughly. Do an in-depth analysis of the person or company’s background and read any reviews prior to ponying up your cash as part of their campaign. Take particular note of other campaigns that the creator has been behind and how those campaigns panned out for participants.
Not finding any info about the organizer or the company?
Finding discrepancies in the details provided?
Does the organizer have a new social media presence with minimal friends/followers?
These are all red flags that the whole thing may be fraudulent, and there’s just a bad actor behind the campaign, reeling in victims.
During your research, be sure to perform Google searches with the project’s name or the organizer’s name along with eyebrow-raising terms such as “scam, “scammer,” “reviews,” “complaints,” and “fraud.” This may help to unearth any previous shady behavior that you need to be aware of.
Any crowdfunding venture should make it clear from the get-go what the funds you dole out are going to be used for. If the campaign doesn’t have a real purpose, it may be illegitimate. You should also be sure in no uncertain terms about what you will get in return for contributing to the crowdfunding campaign.
Get All the Details
It is important to remember that not all crowdfunding campaigns will be successful, but legitimate campaigns will indicate what happens if the project doesn’t take off. Find out how your money will be returned and how long it will take to get a refund for campaigns that fail.
Make Your Voice Heard
If you run across a crowdfunding scam—whether you participate in it or not—it is important that you do not just look the other way. Report the scammer not just to the crowdfunding platform, any social media platform the scammer is using to promote the campaign and to the Federal Trade Commission (FTC). You should also make a report to the attorney general of whatever state that the organizer of the campaign lives in.
Have You Been Scammed?
If you have fallen victim to a crowdfunding scam, do not give up hope of recovering the cash you lost as a result. Our office has a lengthy history of handling issues just like yours, and our check fraud lawyers understand the nuances involved in the process of holding scammers accountable to our clients. Reach out to Sharmin & Sharmin P.A. by dialing 561-655-3925 to discuss your case in greater detail.
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