How indiegogo helps perpetuate frauds

[Thanas]

Indiegogo are scumbags (link with further proof and links)

What’s the right thing to do if your crowdfunding platform guarantees to detect “any and all” cases of fraud, but then is shown clear evidence by Pando of a near-$1m fraudulent campaign happening right now?

If you answered “suspend the fraudulent campaign,” you’re right.

If you answered “quietly delete the no fraud guarantee from our website,” you’re Indiegogo.

I’m not joking. Following a week of reporting by PandoDaily in which we exposed the junk science, corporate smoke and mirrors and flat lies behind Moscow-based Healbe’s Indiegogo campaign, Indiegogo finally took action yesterday. Not by suspending the campaign to protect its users, not by doing anything at all to ensure that thousands of people aren’t about to be swindled out of close to a million dollars… but by deleting the reference to their foolproof fraud detection from their support pages.

Here’s the previous text (emphasis ours):

Indiegogo has a comprehensive fraud-prevention system to protect our users. All campaigns and contributions go through a fraud review, which allows us to catch any and all cases of fraud. If we find fraudulent contributions on your campaign, we may remove them from your campaign Funds and Fulfillment pages. We may also ask you for more information, if we determine your campaign to be a high fraud risk. Finally, all campaigns that raise money go through a final examination before any funds are disbursed.

And here’s how the same page looks now:

Indiegogo has a comprehensive fraud-prevention system to protect our users. Campaigns and contributions that have been flagged by our fraud detection system go through a thorough review. If we find fraudulent contributions on your campaign, we may remove them from your campaign Funds and Fulfillment pages. We may also ask you for more information, if we determine your campaign to be a high fraud risk. In a final step, we perform an examination before funds are disbursed.

On Monday, backers were assured that Indiegogo’s fraud system was comprehensive and infallible — and Pando was told that Healbe had gone through, and passed, those checks. Today, the most the company will say is that it has a fraud-prevention system, which may or may not apply to a particular campaign. Meanwhile, the company still refuses to share with us any details of how it actively cleared a Russian company to misrepresent itself as being based in San Francisco and bring in over $900,000 (and counting) for a product that science says can’t exist.

In my last update — where Healbe’s founders explained that their innovation method was inspired by Russian science fiction, and released a ludicrous “demo” video — I wrote that the Healbe story had gone from scam to farce. Today Indiegogo has made clear that they’d rather be complicit in that farce, and in a million dollar scam, than be forced to take responsibility for what happens on their platform.

We’ve reached out to the company to ask if they’ll at least be communicating the change in their anti-fraud guarantee to the thousands of users who have backed Healbe’s campaign on the basis of that promise. We’ll update this story as soon as we hear back.

[General Zod]

I have to wonder if they bothered to run their terms of service through any sort of lawyers before putting it up. Because making absolute claims like that in your EULA is practically begging for people to slip a fraudulent campaign through for the sake of fucking you in the ass without lube.

[Thanas]

Would be one thing if they actually just take care of their EULA. But not even suspending the fraudsters and allowing them to go unchecked is another thing entirely.

[bilateralrope]

A scam slipping through their anti-fraud methods is understandable. Some combination of laziness from Indiegogo and cleverness from the scammer I can understand. I don't like it, but I understand how that can happen.

But why would Indiegogo keep the scam running once they know it's a scam ?
The only answers I can think of are serious incompetence, or Indiegogo knowing that they make so much money from dodgy campaigns that they don't want to risk the scammers deciding that Indiegogo provides too much scrutiny.

[Steel]

A scam slipping through their anti-fraud methods is understandable. Some combination of laziness from Indiegogo and cleverness from the scammer I can understand. I don't like it, but I understand how that can happen.

But why would Indiegogo keep the scam running once they know it's a scam ?
The only answers I can think of are serious incompetence, or Indiegogo knowing that they make so much money from dodgy campaigns that they don't want to risk the scammers deciding that Indiegogo provides too much scrutiny.

Given indiegogo has an option to get the money raised from your campaign despite not reaching your goal, it is pretty much a given they don't care about fraud or projects not delivering.

If you let incompletely funded projects go through it means one (or all) of three things:
Project creators cannot estimate necessary funds
Project creators inflated necessary funds
Project creators will certainly fail to deliver

In none of those situations are the project creators worthy of a charitable donation from you.