Rallybound COO Joe Magee was a panelist during the Federal Trade Commission (FTC)’s “FinTech Series: Crowdfunding & Peer-to-Peer Payments” forum in Washington DC on Oct. 26, 2016. The panel focused on consumer protection, fraud and the expanding responsibilities – and effectiveness – of crowdfunding platforms. Here’s a few of our takeaways from the event:
Crowdfunding is a three-way street
The sentiments among the six panels was that crowdfunding platforms, consumers, and the organization or persons raising funds all need to work together to ensure that crowdfunding campaigns are run correctly and fairly. While some advocated further regulatory oversight, most panelist agreed that the most immediate way to protect all parties was for the three sides directly involved in campaigns to communicate. In the nonprofit space, RallyBound’s Magee urged consumers to check GuideStar and other ratings services for nonprofits if they have questions about where their donations are going and how they will be used.
Crowdfunding is still at a very early stage
While a number of crowdfunding platforms have already been around for nearly a decade, the panelists agreed that crowdfunding is still maturing on the whole. This includes more specialization, according to Kickstarter general council Michal Rosenn, and the rise of consultants focused on supporting campaigns, according to Andrew Dix of Crowded Media. Ira Rheingold, of the National Association of Consumer Advocates, also cautioned that as the size of the space continues to grow, there will “be people trying to take advantage” of consumers.
The FTC is actively monitoring the space
The FTC’s Helen Wong, who was also a panelist, mentioned during the talk that the agency has taken a number of actions in involving fraud in crowdfunding, and will continue to monitor this developing fundraising space. Rallybound’s Magee also noted that, in addition to regulation, that technology itself should play a major role in preventing fraud and making campaigns fair for all.
Watch the entire panel:
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