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As a GoFundMe campaign unravels, here’s how you can protect your money from bogus fundraising

Click to play video: 'Prosecutor says lawsuit from homeless man unearthed GoFundMe fraud'
Prosecutor says lawsuit from homeless man unearthed GoFundMe fraud
WATCH: On Thursday, prosecutor Scott A. Coffina confirmed that a lawsuit brought by a homeless man against a New Jersey man was a "miscalculation" as it unearthed their collective fraudulent intent – Nov 15, 2018

Charges have officially been laid in a case involving a homeless American veteran, a New Jersey couple and a “fictitious and illegal” GoFundMe campaign that compelled donors to contribute over US$400,000, law enforcement has confirmed.

Mark D’Amico, girlfriend Kate McClure and homeless man Johnny Bobbitt gained significant attention after they launched a heart-warming “Pay It Forward” campaign, only for the public to discover that it was staged from day one.

READ MORE: N.J. couple, homeless man charged over 'fictitious and illegal' GoFundMe campaign

Internet users everywhere have since been reminded not to believe everything they read online.

But how exactly can users be sure they’re giving their money to worthy and legitimate causes?

Users should either donate to online campaigns where they know the individuals who are running them directly, or opt for a registered charity instead, said Mark Blumberg, a Toronto-based charity tax lawyer.

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“My advice would be to, in the case where you know the people involved personally, then you can use a crowdfunding program. But if you don’t actually know the people and you’re just relying on social media or something from stories that are interesting, then I would say it’s better to give money to a registered charity in Canada that is working on a particular issue that can help with the particular problem,” he told Global News.

WATCH: Police confirm New Jersey couple knew homeless man for ‘about a month’

Click to play video: 'Police confirm New Jersey couple knew homeless man for ‘about a month’'
Police confirm New Jersey couple knew homeless man for ‘about a month’

The story of D’Amico, McClure and Bobbitt went viral in November 2017, the prosecutor stated.

McClure said she ran out of gas in Philadelphia when she encountered Bobbitt, who gave her his final $20 so she could fill her tank.

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The couple then started a GoFundMe campaign to raise money for Bobbitt that drew more than $400,000 in donations.

Bobbit brought a lawsuit against D’Amico and McClure in September, asserting that he wanted an equal cut after he received $75,000 of the earnings.

READ MORE: N.J. woman raises over $250K for homeless man who gave her his last $20

Prosecutors later looked at 60,000 text messages and found that Bobbitt had never actually given McClure the money for gas. They learned at that time that the whole thing was staged.

Had the three not begun fighting over the money, “there’s a very good chance” they might have gotten away with the scheme, the Burlington County prosecutor said Thursday.

While unfortunate, Blumberg said these fraudulent campaigns are likely more common than we realize.

“Because it’s so easy for anybody to set up a campaign, it’s not hard to imagine that when you have almost no control that some people will take advantage of a situation like that.”

The reason? There really aren’t any rules governing the online crowdfunding space, Blumberg added.

READ MORE: Court hearing on Humboldt Broncos fundraising a first under Saskatchewan law

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“There really aren’t any rules that are governing crowdfunding, as opposed to registered charities which have to do filings every year and they can be audited by the Canada revenue agency and things like that,” he states.

In fact, Saskatchewan is currently the only Canadian province that has enacted legislation to govern crowdfunding campaigns.

In the United States, the laws around online fundraising vary state by state, but they’re more specifically directed at startups or other innovators raising funds for new product launches or business expansions, according to Entrepreneur Magazine.

In Saskatchewan, new laws were enacted in 2012 by a national body called the Uniform Law Conference, which proposes changes when gaps are identified in existing laws.

WATCH: Text messages show New Jersey couple was in financial difficulty

Click to play video: 'Text messages show New Jersey couple was in financial difficulty'
Text messages show New Jersey couple was in financial difficulty

Under the law, a court hearing can be requested by a trustee, a donor, a person who benefits from a fund, the attorney general or anyone the court considers has a sufficient interest in a fund, Global News previously reported.

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However, even this law is focused more specifically on divvying up the payments incurred from the campaign.

GoFundMe uses ” proprietary fraud prevention technical tools” and has numerous processes to verify the identities of campaign organizers, spokesperson Rachel Hollis said in an email.

“We have a community of 50 million users — when they see something they think might not be right, they tell us, and our team looks into it. If a campaign receives a complaint, the funds cannot be withdrawn until the issue is resolved,” she said.

READ MORE: The viral story of Keaton Jones: Cautionary tale on Internet fame and crowdfunding

People are advised to avoid pages with minimal information, to contact the people who create the campaigns, to perform a reverse-image search on Google to determine whether a campaign has stolen a photo, to check the social media accounts of the campaigners and look for updates from contributors.

As for the New Jersey couple and the homeless veteran, law enforcement announced Thursday that GoFundMe would issue refunds to anyone who donated to the campaign.

–With files from Andrew Russell and the Associated Press. 

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