“Being transparent about their policies is crucial and we will hold them accountable where they fail to be fair and open in their transactions,” AG Fitch said.

On Monday, Mississippi Attorney General Lynn Fitch led a bipartisan coalition of Attorneys General in writing GoFundMe to urge better disclosure policies and greater clarity in terms of service for consumers who use their platforms.

“Crowdfunding platforms are full of opportunity for helping individuals make big impacts in the world around them,” said Attorney General Lynn Fitch. “But these platforms have a responsibility to ensure that the wishes of the users and the donors are carried out true to their intentions. Being transparent about their policies is crucial and we will hold them accountable where they fail to be fair and open in their transactions.”

The bipartisan coalition of Attorneys General expressed concern over GoFundMe’s Terms of Service which states that GoFundMe can suspend or remove a user’s account, freeze a donation, or stop payment to a fundraiser for “any activity that GoFundMe may deem, in its sole discretion, to be unacceptable.”

“The GoFundMe platform serves an important purpose by facilitating charitable giving. However, the parameters under which a user’s donation may be blocked, frozen, re-directed to another fundraiser, or refunded without the user’s consent are unclear,” the letter said. “While platforms like GoFundMe can and should act as conduits connecting donors and fundraisers, platforms like GoFundMe are not and should not be empowered to unilaterally make decisions regarding where donated funds will go or why.”

The Attorneys General said that 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.

“Such a role implicates significantly different regulatory schemes directed at ensuring transparency in charitable giving,” the letter continued.

The Attorneys General ask GoFundMe to take the following steps in response to their letter:

  1. Explain how GoFundMe investigates or analyzes fundraisers on its platform, and what criteria GoFundMe uses to determine whether those fundraisers are fundraising for acceptable purposes or not.
  2. Explain how GoFundMe determines whether to block, freeze, re-direct, or refund donations, and what criteria GoFundMe uses to decide which avenue to take.
  3. Explain in detail how GoFundMe handles donations when GoFundMe decides to (i) block donations, (ii) freeze donations, (iii) re-direct donations, and/or (iv) re-direct donations.
  4. Review your 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 by conspicuously disclosing those circumstances through the user interface on your platform.
  5. Explain in detail the meaning of the term “unacceptable” in the context of your Terms of Service and describe whether there are additional internal policies defining it.
  6. Articulate any steps being taken to address these issues in the form of a responsive letter or a meeting with the undersigned attorneys general.

You can read the full letter below.

Bipartisan Coalition of 28 Attorneys General Urge Better Disclosure and Clarity From GoFundMe by yallpolitics on Scribd