Dutch regulator instructs crowdfunding platforms to stop with hidden costs
The Dutch Authority for Consumers and Markets (ACM) has instructed seven crowdfunding platforms to be clearer about their charges after receiving many complaints from consumers suddenly having to pay VAT and other costs when they were under the impression that they could fundraise for free on a platform. According to the ACM, the platforms involved have agreed to clarify their information provision.
The crowdfunding platforms involved are Doneeractie, Doneerveilig, Geef.nl, Getfunded, GoFundMe, Steunactie, and Whydonate. The ACM pointed out that crowdfunding platforms must comply with the same rules that apply to other online services, and that includes clear and noticeable information about the costs involved before the service is engaged.
“If you start a fundraiser, for example for the treatment of a family member who is very sick, you want to raise as much money as possible. If it then turns out that the platform has withheld part of the donations without informing you, you will be disappointed,” said ACM director Edwin van Houten. “That is why it is important that consumers receive clear information about this in advance, so that they know that this service is not for free and that the platform withholds part of the proceeds. In that way, they are able to compare providers with each other and choose the best offer.”
The ACM instructed the platforms to place a cost breakdown, including VAT and transaction costs for transferring the donations, in a noticeable location on their websites. “This means that users do not need to look high and low for this information. It is not sufficient to place information under an i-symbol, to have the information displayed when hovering over an icon, or to use a link you have to click on,” the authority said.
According to the regulator, the crowdfunding platforms have promised to improve their information provision after the ACM confronted them with the shortcomings. The ACM will continue to monitor the platforms to ensure that they implement the adjustments agreed to.
