Over the past decade or so, crowdfunding campaigns have allowed artists to raise money to complete their albums, books and movies while allowing developers to bring interesting gadgets to market. But there have also been a number of high-profile crowdfunding fails, sometimes due to overly ambitious projects from inexperienced creators, and sometimes from outright fraud.

So Indiegogo has announced plans to shift its platform from one that allows just about anyone to start a campaign to one where campaigns are vetted by staff to screen out likely fraud.

According to a report from The Verge, Indiegogo will start by performing manual reviews “on a small number of campaigns” at first, but the practice “will be rolled out more widely in the coming months.”

There’s also a new team at Indiegogo that will take a look at some of the riskiest campaigns flagged by backers, potentially responding to the worst offenders by:

  • Banning the campaign operator from launching any new campaigns
  • Reporting campaign owners to law enforcement
  • Hiring collections agencies to recoup funds from campaign owners

There will always be some risk involved in crowdfunding, and these new measures won’t change that. In most cases you’re basically helping to fund a thing that does not yet exist, and no matter how much money you throw at it, there’s a chance that the people running on the campaign won’t be able to deliver on the promise.

But it’s good to see that Indiegogo is codifying a set of steps it may take in situations where the campaign owners don’t even seem to be trying, break Indiegogo’s terms of service, or become non-responsive.

The company is also partnering with another GoFundMe, another crowdfunding service to create a new Crowdfunding Trust Alliance, which the companies say offers best practices for “trust policy, fraud detection, and prevention” for crowdfunding services. The companies are inviting other established crowdfunding companies to join the alliance, but it’s noteworthy that Kickstarter, which is one of the biggest names in this space, has not yet joined.

Starting next year Indiegogo will also launch a Trust Loyalty Program that will provide “the most reliable campaign owners” with a Trust Loyalty badge they can put on their campaigns and a Guidepost Program where a team from Indiegogo will monitor select campaigns that may face certain challenges, and share best practices with campaign owners who “seem unlikely to meet our criteria of success.”

via The VergeGoFundMe Stories, and Indiegogo

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5 replies on “Indiegogo to begin vetting crowdfunding campaigns to screen out fraud, partners with GoFundMe on best practices”

  1. It makes you wonder what the real reason GoFundMe and Indiegogo partnered up to do this. Was this socio/politically driven? So they can shut down whomever they don’t like under the guise of “fraud protection”?

    1. I’m absolutely certain this is being done in an attempt to keep their payment processor fees lower.

      When you run an E-commerce platform like this, you need to negotiate fee structure with the payment processor that you choose to work with. Many things factor into the fees that you pay, but the biggest factor is the risk of fraud. If they can lower the rate of fraud by a few percent, it might save them a huge amount in transaction fees.

  2. It’s a bit late at this point. I only look at crowdfunding campaigns to see how badly things are going now. Please, please, I need another super fast SSD USB with slick marketing videos and a constantly slipping shipping schedule…

  3. Hope this is effective – I’m out $1000s on bad IGG campaigns – their failure rate is dramatically higher than Kickstarter based on my extensive (expensive?) experience with both.

    1. They are the absolute worst! Their policy is that you need to contact the creator but when the creator stops responding and their website and e-mail address no longer exist, all Indiegogo customer support can tell you is contact the creator”. I asked them one time for the contact info they had on file for the creator that they did business with and they gave me nothing. I had no idea what legal entity I was dealing with, an individual or a corporation, they wouldn’t tell me anything. I’m pretty sure they don’t care. I find it hard to believe this new vetting program will actually accomplish anything but I hope for the backers that it does. I personally think it’s just another deception. I have sworn off backing anything on Indiegogo since 2018 and don’t feel like I’ve missed out on anything.

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