From ‘abuse and heartache’ to fraud, we investigate what happens when online fundraising goes wrong

Crowdfunding has grown to be one of the biggest money-spinners of the 21st century, raising £150million in the UK last year alone. JustGiving – the first online charitable platform, founded in 2001 – has generated £3.2billion in its lifetime, and the channel is set to generate more income than any single charity by 2019.

“If you want people to do something, you make it as easy as possible, and these platforms provide a seamless process,” explains psychologist Greg B Davies, head of behavioural science at Oxford Risk.

“A lot of people don’t give to charity because they are unsure how much to donate. On these sites you can see what people have donated, so you know what’s appropriate.

"It also allows you the option of identifying yourself and leaving a message, so other people can see what you have given. It is a nugget of social validation.”

However, despite the huge amount of money that flows through it, the crowdfunding system is still largely unregulated, and concerns are now being raised.

Earlier this month, “homeless hero” Chris Parker, who claimed to have comforted victims after the Manchester Arena bombing in May last year, was back in the headlines for all the wrong reasons.

Inspired by Parker’s apparent selflessness, 25-year-old Michael Johns from Nottingham had set up a page to raise money for him in the aftermath of the attack. It was set with an initial target of £1,000, yet raised over £52,000.

However, in August, Parker was charged with stealing a purse from bomb victim Pauline Healey as she lay injured, plus the mobile phone of a teenager. At his trial a few weeks ago, Parker admitted two counts of theft and one of fraud, and is currently awaiting sentence.

And the money raised in his name? It’s being refunded to everybody who donated.

When Darren Head, 39, set up his fund-raising page for Claire, initially she found it a great support. “It was mainly friends and family who were donating, which gave me some comfort as they left really nice messages of condolence,” she remembers. “But after a few weeks, people started asking whether I’d received any of the money. I hadn’t, so asked my brother, who tried to contact Darren.”

But the family was repeatedly fobbed off. “He was told Darren was on holiday, or in hospital, or away for work,” says Claire, who runs the floodlighting business she and Stuart set up. “It became obvious something was amiss. It was such a difficult, emotionally draining time, and this was the last thing I needed.”

Around six weeks after the site was set up, Claire contacted JustGiving.

“They didn’t help at all,” she says. “As the money had already gone to Darren, I was told I had to take it up with him. When that didn’t work, the company told me to go to the police. I was barely getting through the days after Stuart died, so dealing with that on top of everything was just awful.”

Eventually, police arrested Darren, who told them he took the money for drink and rent. He pleaded guilty to theft and received a 14-week suspended jail term.

I can't believe he used my husband's death to commit fraud

Claire BlundenWidow

“I couldn’t believe how easy it was for him to set up a page and take money. It really is shocking,” says Claire, who has found love again and had son Charlie in November last year with her partner James Clark, 39, an audiovisual engineer.

“It’s not even the money – it’s that it all became about Darren,” she says. “People should have been remembering Stuart, but instead they were talking about the crime, and I truly resented that. I still can’t believe someone used my position to commit fraud.”

But even when no crime is carried out, crowdfunding can cause huge headaches for those involved, as beautician Katie Cutler, now 23, from Gateshead, discovered.

In early 2015 she raised over £300,000 for disabled pensioner Alan Barnes after he was mugged.

“When I read that he was [so] scared that he did not want to go back to his home, I knew I had to do something to help,” Katie said at the time. “I never thought it would take off in this way. I am thrilled that it has done.”

After raising the money for Alan, Katie was inundated with requests from other people who wanted help, so she set up the Katie Cutler Foundation to carry on charity work. But her kindness landed her with a £6,200 bill after she was taken to the small claims court by a PR company in a row over unpaid publicity fees for her charity foundation.

“All I ever wanted to do was to help others,” Katie explained at the time. “It is a terrible ordeal… There are dark days when I wish I never got involved, but then I think of the people I helped and I cannot regret it for long.”

After her experience, Katie tearfully announced she was stepping away from charity work. “I’m happy that I’ve done a few nice things and helped people who sadly aren’t with us now but because of this I won’t do any more charity work,” she said.

The list of crowdfunding failures goes on. In September 2016, dance teacher Andrew White, 34, was convicted of creating a bogus bucket list and raising hundreds of pounds for a fictitious young cancer sufferer on the Virgin Money Giving site. He was fined £85 and given a two-year conditional discharge.

And last April, an investigation was launched into suspected fraud on a GoFundMe page set up to raise money to reunite retired police dog handler Sgt David Evans with his canine partner Ivy, who was being placed with a new handler. A petition was initially set up by David’s daughter Jennie, but quickly taken over and turned into a fund-raising page by a separate third party. However, later that month the page disappeared – along with

the cash. Soon after, a 32-year-old man was arrested for fraud and released on bail. The investigation is ongoing.

The system will always be open to abuse and heartache

While criminal law may cover straightforward fraudulent activity, there are no regulations for the grey areas that occur when circumstances change, usually through no fault of campaign organisers. For example, if someone becomes too ill to qualify for the treatment money is being raised for, or if it goes towards something not specified in the fund-raiser story.

So what happens if the lines do blur?

A spokesperson for GoFundMe insists the company always encourages ongoing communication between donors and fund-raisers to make sure it’s clear how the funds are going to be used: “In the very rare event that people are concerned, they are fully protected by the GoFundMe guarantee and can request a refund.”

However, GoFundMe also makes it very clear on its site that it bears no responsibility if things do go wrong. Similarly, JustGiving’s spokesman Rhys Goode says: “The fund-raiser is responsible for spending the money as they say they would – if they don’t, that is technically fraud. If a donor is unhappy, they would have to take it up with the crowdfunder directly, though, as it’s a contract between the two of them.”

However, Rhys says that the tragic story of six-year-old Bradley Lowery is a positive example of what can happen when money isn’t used in the way it was intended.

First diagnosed with rare neuroblastoma when he was 18 months old, Bradley fought for two years before going into remission. As the cancer had a high risk of recurrence, his parents Carl and Gemma, along with friend and campaign manager Lynn Murphy, began to raise funds to take him for pioneering treatment in the US should he relapse.

In July 2016 the cancer returned, and the high-profile campaign eventually raised £700,000 for the planned treatment. Sadly, as Bradley’s condition deteriorated, the treatment was no longer an option.

He died in July last year, aged six, and the family have now set up a charitable foundation in his honour to support families with their own fund-raising campaigns. The money has been transferred into this.

“We see that with a lot of families, where unfortunately the money comes too late, or it can’t be used for the treatment, and they find new ways of using the donations in a positive manner,” says Rhys.

It’s clear that Bradley’s funds are being handled in a responsible way and being put to good use. But with such a large number of fund-raising pages being launched year on year, it still remains hard for providers to ensure all are legitimate.

“We try to do as much as we can to protect everyone involved,” explains Rhys. “Crowdfunders must be verified before they receive payments. That involves ID checks and checks against fraud and terrorist databases.”

Beyond that, Rhys admits companies are forced to rely on users to raise concerns, as they did after the Westminster Bridge terrorist attack when JustGiving took control of a page that had raised £17,000 in memory of victim Aysha Frade. Donors noticed that the person who set up the page had the same name as a woman who had been convicted of fraud and notified moderators. Following the incident, JustGiving introduced a policy to put into “quarantine” any account set up in response to a major incident while checks are made.