GoFundMe has changed how people ask for help. It’s easy to set up a campaign and share your story. But sometimes, things go wrong. Some campaigns end up in courtrooms instead of helping hands. If you’re thinking about starting a GoFundMe or donating to one, you need to know the risks. Here are ten real situations where a GoFundMe campaign led to legal trouble—and what you can learn from them.
1. The Homeless Veteran Hoax
A couple and a homeless veteran raised over $400,000 on GoFundMe. They claimed the money would help the veteran get back on his feet. But the story was fake. All three were charged with conspiracy and theft. The court ordered them to pay back the money. This case shows that lying on GoFundMe can lead to criminal charges. If you’re running a campaign, always tell the truth.
2. Misusing Funds for Personal Gain
A woman started a GoFundMe for her child’s medical bills. She raised thousands. But instead of paying for treatment, she spent the money on vacations and shopping. Donors found out and reported her. She was charged with fraud. If you collect money for a specific reason, use it for that reason. Misusing funds is illegal and can ruin your reputation.
3. Fake Illness Claims
Some people pretend to be sick to get donations. One man claimed he had cancer and raised money for treatment. He didn’t have cancer. When donors learned the truth, he was arrested for theft by deception. Lying about illness is not just unethical—it’s a crime. If you’re tempted to exaggerate, remember that donors can ask for proof.
4. Fundraising for Illegal Activities
A man set up a GoFundMe page to cover the costs of his legal defense after being charged with a crime. The campaign was shut down because it violated GoFundMe’s terms. In some cases, raising money for illegal activities can lead to more charges. If you’re not sure if your campaign is allowed, check the rules first. GoFundMe’s terms of service are clear about what’s not allowed.
5. Failing to Deliver Promised Rewards
Some campaigns offer rewards to donors. One person promised t-shirts and thank-you notes but never sent them. Donors sued for breach of contract. Even small promises can be legally binding. If you offer something, deliver it. Otherwise, you could end up in court.
6. Using Someone Else’s Story
A woman used photos and stories from another family’s tragedy to raise money. The real family found out and sued her for invasion of privacy and misrepresentation. She had to pay damages and return the money. Always get permission before sharing someone else’s story. Using someone’s pain for profit is both wrong and risky.
7. Raising Money for Nonexistent Events
A man claimed his house burned down and asked for help. He posted fake photos and raised thousands. Neighbors reported that his house was fine. He was charged with wire fraud. If you make up a story, you’re not just breaking GoFundMe’s rules—you’re breaking the law.
8. Not Paying Taxes on Large Donations
Some people don’t realize that large GoFundMe payouts can be taxable. One woman raised over $100,000 for a family emergency. She didn’t report it to the IRS. Later, she faced penalties and back taxes. If you raise a substantial amount of money, consult a tax professional. The IRS may consider your GoFundMe contributions as taxable income.
9. Campaigns for Controversial Causes
A group raised money for a cause that many saw as hateful. The campaign was reported and taken down. The organizers faced harassment and legal threats. GoFundMe can remove campaigns that violate its policies. If your cause is controversial, be ready for backlash and possible legal trouble.
10. Disputes Over Who Gets the Money
Sometimes, families or groups disagree about who should get the funds. After a tragedy, one family member started a campaign. Others said the money wasn’t distributed fairly. The dispute ended up in court. If you’re raising money for a group, set clear rules about how the money will be used. Put it in writing to avoid misunderstandings.
What You Can Learn from GoFundMe Legal Trouble
GoFundMe is a powerful tool, but it comes with responsibility. If you’re honest, follow the rules, and use the money as promised, you’re less likely to face legal trouble. But if you lie, misuse funds, or ignore tax laws, you could end up in court. Always read GoFundMe’s terms, keep good records, and be transparent with donors. If you’re not sure about something, ask a lawyer or tax expert. Protect yourself and your donors by doing things the right way.
Have you ever donated to a GoFundMe or started your own campaign? What was your experience? Share your thoughts in the comments.
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