BBB Receives Hundreds of Crowdfunding Complaints

Take Caution When Donating to a Business Venture
May 31, 2017

Many crowdfunding donors have recently been left in the dark because of shady business venturesCrowdfunding is a method of raising money from multiple donors, typically via the internet. Charities and businesses often use crowdfunding websites to get a business or project off the ground. Since it’s often difficult to determine if a crowdfunding campaign is legitimate, Better Business Bureau Serving the Northwest adviseconsumers to be cautious before investing in a business venture.  

BBB Northwest has received more than 100 crowdfunding complaints from victims about businesses collecting donations for projects. Recently, a Western Washington man was scammed out of $80 by a crowdfunding site when he decided to contribute to a business projectThe project was underway, so he expected to receive updates. Instead, he received a message claiming the company is having “financial issues” involving a team member.  

Before making any contributions to a business venture, make sure to follow these BBB tips:  

  • Look for current information: If the campaign fails to provide information on their website such as written updates, how contributions will be used or photos, it could be a risky investment. Also, check to see if the business is active and sharing current product information on social media such as LinkedIn and Facebook.   

  • Read the fine print: Sites need income to continue operating and many companies will take a small percentage of donations to cover expenses. Others may charge donors a fee. To give or receive funds, users will have to input personal information. Make sure to review the privacy policy as well as terms and conditions 

  • Start with trust: Several crowdfunding sites are BBB accredited. Take the time to read reviews and company responses at Sites should also be secure; steer clear of entering payment or personal information on unsecured sites or public WiFi. 

  • Check the records: Investors donating any amount of money want to know that it is not going to a money launderer and the person running the campaign exists. Check court documents and look for any bankruptcies or records of previous business operations. 

  • Don’t assume it’s deductible: Funding a project that is run by an individual or business instead of a charity may not be deductible as a charitable donation for federal income tax purposes.   


ABOUT BBB: For more than 100 years, Better Business Bureau has been helping people find businesses, brands and charities they can trust. BBB Northwest serves more than 14 million consumers in Alaska, Washington, Idaho, Oregon, Montana and Western Wyoming.