Fund at your own risk: Those who crowdfund for helping others get treatment, are vulnerable to fraud

Illustration: Yogendra Anand / CSE

Early this year, Meena Joshi (name changed), a professor in Mumbai, was approached by a friend, a medical professional, with a request to contribute for the liver transplant surgery of a 7-year-old child. Joshi was told that the child was suffering from Wilson’s disease, a genetic disorder that leads to accumulation of copper in vital organs, and was directed to a medical crowdfunding platform on social media site Facebook.

The platform had set the target of raising Rs 22,00,000. Joshi donated a small amount and shared the fundraiser link in her network via emails and on her social media platforms, prompting a contribution of Rs 3,81,235 through 251 donors.

A couple of months later when Joshi sought an update from her friend on the child’s health, she was informed that the treatment had been indefinitely postponed due to personal reasons of the patient.

Another four months passed, and Joshi found out from the friend that the surgery had been cancelled; neither the crowdfunding platform nor the hospital informed her about it.

What’s worse, while the hospital authorities were reluctant to assist in the refund of the money received through crowdfunding platform, the latter claimed that the hospital did not update it about the surgery being cancelled.

Joshi then requested both the hospital and the crowdfunding platform to provide her the list of donors so that she could inform those in her network about the development. While the hospital authorities claimed it did not have the list, the crowdfunding platform refused to share it; its website had only a partial list of the donors.

After seeing no help from either the hospital or the platform, Joshi had to threaten the latter with exposure on social media to help some donors get back their money. What happened to the rest of the funds is left to one’s imagination.

Joshi’s experience is a reminder of the uncertainties and wide gaps in the business of crowdfunding for treating medical emergencies, which has gained ground in the past decade, backed by an increase in internet access.

Estimates show globally crowdfunding is a US $34 billion industry. In India, the industry is equally robust. Media reports say that Mumbai-based crowdfunding platform Ketto raised $700,000 from angel investors in 2015 to grow its business to a target of $100 million in sales volumes.

Similarly, ImpactGuru has reportedly raised $4.7 million from various corporations. The main tools deployed by these companies are targeted campaigns on social media platforms like Facebook and YouTube which allow funds to flow from the donor to the platform or to the recipient institution in a matter of a few clicks.

During the COVID-19 pandemic, for instance, there was an exponential rise in such posts and fundraising campaigns for treatment of people suffering from severe impacts of the novel coronavirus and unable to afford healthcare.

The prime reason medical crowdfunding has emerged as a popular option is that access to affordable healthcare is still a challenge for many in the country despite that right to health is a fundamental right guaranteed to every citizen as per Article 21 of the Constitution.

A 2018 study by the Public Health Foundation of India, a public-private initiative, states that some 55 million people in the country were pushed into poverty in a single year due to healthcare related expenses; 38 million of them fell below the poverty line due to expenses on medicines alone.

The Union government’s think tank NITI Aayog also acknowledges in its 2021 report that 30 per cent of the country’s population do not have health insurance and are at the risk of being pushed into poverty in case of a health crisis.

This “missing middle class” is neither poor enough to be eligible for public schemes like the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana nor rich enough to afford private insurance, says the NITI Aayog report.

In such a situation, as Joshi’s experience shows, there is a greater need for transparency and regulation of crowdfunding. As of now, there is no framework for the roles and responsibilities of the donor, the fundraising platform or the receiving institution.

There are also no requirements to disclose the operation procedures, profit and loss accounting or fee structure of the platforms. So the government must urgently introduce policies to regulate and monitor crowdfunding.

Such platforms must be ordered to provide details about fees they charge, to disclose information about finances left over if the treatment is cancelled or partially completed and to set up a process for refunds.

There should be provisions to set up a grievance mechanism and an arbitration authority to resolve disputes among any of the groups involved.

Given that the internet is the primary avenue of such platforms, data security is also a concern. Currently there is no information whether platforms or recipient institutions have set up safeguards to secure online data of the donors.

In case of a breach, who would be held accountable? Finally, these platforms must be regularly audited and their ratings published in the public domain. This will ensure donors do not lose funds to fraudulent platforms with fake campaigns.

Raji Ajwani-Ramchandani is founder of ResInCe. Shishir Kumar Jha is head, Ashank Desai Centre for Policy Studies, Indian Institute of Technology-Bombay

This was first published in the September 16-30, 2022 print edition of Down To Earth

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