Snap! Raise ‘Siphons’ Money from Online Fundraising Campaigns, Class Action Lawsuit Claims

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Snap! Mobile, Inc. has been hit with a proposed class action lawsuit that alleges the company’s Snap! Raise fundraising platform employs deceptive and misleading tactics, including dark patterns, delayed disclosures, and pre-selected options, to extract more revenue from unwitting donors.   

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The 23-page lawsuit asserts that although Snap! Raise claims that youth sports and community organizations can keep “80 percent or more” of the funds raised with “no upfront cost,” the company deceptively “siphons” up to 20 percent of each charitable donation made on the online fundraising platform while separately suggesting that the automatically added four percent “processing fee” and pre-selected “tip” cover the platform’s operating costs.

According to the suit, Snap! Raise, which serves as an intermediary between donors and local organizations they intend to support, does not clearly disclose to donors that the platform may keep as much as one-fifth of their intended contribution before it is received by the recipient.

“That omission matters,” the complaint states. “A reasonable donor who clicks a personal fundraising link and enters a donation amount expects the amount designated as the donation to support the named team or organization.”

Further, the case alleges that Snap! Raise surreptitiously collects more money from donors by way of a preselected “tip” and four percent “processing fee”  that are automatically added to each donation, which users must affirmatively opt out of to avoid paying the additional charges.

“Snap! Mobile presents the tip late in the checkout process, after donors have already clicked a personal fundraising link, chosen an amount, entered transaction information, and invested time and effort in completing the donation,” the filing reads.

Critically, the lawsuit contends that Snap! Raise collects these additional charges by deploying deceptive dark patterns and “negative option” fees, whereby a user’s silence or failure to act is interpreted as consent, to “extract” additional revenue from donors.

To remove the automatically added “processing fee,” the suit says, a user must realize that the processing fee is not mandatory and de-select a prechecked box. Similarly, removing the default “tip” requires a donor to locate the tip amount, which is only disclosed in small, light-colored font, and manually change the tip amount to zero, the case states.

In addition, the complaint relays that Snap! Raise fails to disclose what additional services the “tip” covers, an omission that is particularly misleading because the platform already retains up to 20 percent of each donation in addition to asking donors to cover processing fees. The case argues that the tip is not tied to any “donor-requested service” and instead serves as additional revenue for Snap! Mobile.

“Plaintiff and other reasonable donors give money to support children, teams, schools, and community causes,” the lawsuit says. “They do not intend to enrich a private intermediary through undisclosed deductions, preselected charges, or misleading add-on fees.”

The complaint cites several public complaints about allegedly misleading representations and undisclosed junk fees associated with the Snap! Raise platform. Per the suit, one consumer review states that “[w]e raised over $31,000 dollars [sic] and only received a check to the school for $19,994 and some change. Snap took way more than 25%.”

The lawsuit claims that Snap! Mobile knows that if donors were given the option to affirmatively opt in to the “processing fee” and “tip” amount added to each transaction, in addition to the 20 percent retained by the platform, many users would decline to give a private, for-profit company additional funds on top of their donation amount.

The Snap! Raise class action lawsuit looks to cover all individuals in Washington who, within the applicable statute of limitations period, donated through Snap! Raise and from whose donations Snap! Mobile retained a percentage-based platform fee.

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