Check Fraud Stories on GoFundMe… Are They Scams, Too?
- GoFundMe can be a wonderful tool to help people
- As expected, fraudsters have targeted this tool
- As last line of defense, banks need to be aware of this threat
Our Modernizing Check Fraud Detection blog allows readers to access myriad topics -- from trends and reports to the latest innovations for check fraud detection. However, while the industry understands that attempts and losses affect financial institutions heavily, the victims (businesses and individuals) are the ones that are impacted most.
This is particularly true for individuals, as these lost funds can mean they are not able to pay their bills or put food on their tables. This desperation leads a portion of the victims to rely on the generosity of strangers via the internet, who donate funds to help their needs via websites like GoFundMe.
Victims of Check Fraud
A simple search of the keyword "check fraud" on the GoFundMe website provides a glimpse of individuals who were exploited by fraudsters. The range of victims is wide:
- New college grad falls victim to employment scam -- sending "equipment money" for their first job
- A group of college kids having their rent check stolen in the mail -- ending with the fraudster altering the payee name and stealing the funds
- A single mother is lured into a romance scam -- subsequently being investigated for check fraud by the financial institution
These victims put in perspectives the effects of check fraud and "humanizes" the event. However, as much as we would like to believe that all of these persons are victims, fraudsters will exploit any weakness -- even the sympathy of generous strangers on the internet.
Scammers Leveraging GoFundMe
The mission of websites like GoFundMe is helping individuals via generosity of the masses. However, as with most good things, fraudsters look to exploit this for their own gains.
One of the most viral incidents occurred back in 2022, but serves as a prime example of how some stories can actually be scams. Mark D'Amico and his then-girlfriend, Katelyn McClure, conjured up a story wherein Ms. McClure's vehicle had run of gas down on the highway. Homeless veteran Johnny Bobbitt Jr. approached Ms. McClure and used his last $20 to buy her gas to get home safely. The story led to a GoFundMe campaign that raised of $400K for Mr. Bobbitt Jr.
Unfortunately the story was a scam... Read the full story here.
Even within the search for check fraud, there are a few campaigns that raise red flags -- with one campaign raising money to start a business to combat fraud while noting "I wont be returning the money to anybody but know then that your donations will actually save people their hard earned money from going into the hands of criminals." .
With all this in mind, financial institutions need to remember that they are the last line of defense for customers, who put their faith in their FI. Even when they are victims, the FI takes the brunt of the blame. FIs need to continue their efforts to combat check fraud by deploying the latest innovations in check fraud detection such as image forensic AI, while also continuously communicating with and educating their customers as to the red flags that identify possible scams.