KANSAS CITY, Mo. — Attorneys general across the country are raising questions about the business practices of popular fund raising payment platform GoFundMe.
On Tuesday, Kansas Attorney General Derek Schmidt announced he's joining the effort in calling for reforms.
"Users of the site pay a fee of 2.2-2.9%, plus 30 cents per transaction. But information on the terms of service and policies, particularly related to blocking, freezing, refunding, and re-directing donations, is hard to find and unclear," a release from Schmidt's office said.
The letter to GoFundMe alleges that the site is not transparent about verifying which fund raisers are legitimate, and rerouting donations.
“If GoFundMe is making opaque and unilateral decisions about which fundraisers are legitimate and which fundraisers to re-route donations to irrespective of initial donor choice, GoFundMe has likely crossed the line from fundraising platform to fundraiser itself," the letter said. "Such a role implicates significantly different regulatory schemes directed at ensuring transparency in charitable giving.”
The letter included a list of several steps they are asking GoFundMe to take, including:
- Explain in detail how GoFundMe investigates fundraisers on its platform and what criteria GoFundMe uses to determine whether those fundraisers are fundraising for acceptable purposes.
- Explain in detail how GoFundMe determines whether to block, freeze, re-direct, or refund donations, and what criteria GoFundMe uses to decide which avenue to take.
- Explain in detail how GoFundMe handles donations when GoFundMe decides to (i) block donations, (ii) freeze donations or and/or (iii) re-direct donations.
- Review its policies and terms of service to ensure that donors are adequately and conspicuously informed at the time of their donation of the circumstances under which their donation may be blocked, frozen, re-directed or refunded without their authorization.
- Articulate any steps being taken to address these issues in the form of a responsive letter or a meeting with the attorneys general.
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