News 4 Investigates: Crowdfunding sites being scrutinized - KMOV.com

News 4 Investigates: Crowdfunding sites being scrutinized

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Crowdfunding sites are now being looked into for potential fraud. (Credit: KMOV) Crowdfunding sites are now being looked into for potential fraud. (Credit: KMOV)
ST. LOUIS, Mo. (KMOV.com) -

Legislators are now zeroing in on crowdfunding campaigns.

Websites like gofundme.com and youcaring.com are often used to solicit charitable donations. The sites can be very helpful.

The problem is the people who should get the money don't always wind up with the funds they deserve.

Tyree King was killed by a drunk driver last summer near his home in Springfield, Ohio. The next day, the 13-year-old's parents say they were consoled by a neighbor they had never met before.

The woman offered to set-up a youcaring.com crowdfunding website to raise money for King’s funeral expenses.

But that neighbor, Tina Harper, pleaded guilty to telecommuncations fraud after King's parents accused her of pocketing more than $1,000 of the nearly$3,000 raised.

Sites like youcaring.com and gofundme.com are increasingly popular ways to raise money for people who need help with everything from medical bills to adoption fees and even college tuition.

Crowdfunding sites raised an estimated $2 billion in 2015, usually profiting through fees or percentages of donations.

This multi-billion dollar industry is largely unregulated.

"Frankly, it's embarrassing," Daniel Saper, youcaring.com, said.

Saper insists incidents of fraud are rare.

"The vast, vast majority of people who are coming to us to use the site are good natured people," Saper said.

Gofundme.com also issued a statement insisting fraud is something that happens less than one-tenth of one percent of the time on its platform. Any campaigns showing potential fraud are immediately removed.

A U.S. senator is asking the Federal Trade Commission to examine the problem.

Copyright 2016 KMOV (Meredith Corporation). All rights reserved. 

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