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Kickstarter Scammers, Beware: FTC Now Taking Legal Action Against Misuse of Funds
One of the main concerns with crowdfunding websites like Kickstarter is the uncertainty surrounding the use of funds after a campaign ends. Once people give money toward a Kickstarter, they want the product to actually come to fruition. While people who run Kickstarter campaigns are bound by the terms and rules of Kickstarter, sometimes funds are misused.
Now, however, the Federal Trade Commission has decided to take action in at least one of these cases. A 2012 Kickstarter for a board game called The Doom That Came to Atlantic City succeeded in raising over $120,000, significantly more than its $35,000 goal, but the creator of the game ended up using the money on personal expenses rather than making the game. After fourteen months, he abruptly canceled the project and didn't fulfill all of the backer rewards. Recently, the FTC decided that this violated the law and filed a complaint with a federal court. You can read the whole statement on the case here.
In a statement to backers, the creator explained, "From the beginning the intention was to launch a new board game company with the Kickstarted funds, with The Doom that Came to Atlantic City as only our first of hopefully many projects. Everyone involved agreed on this. Since then rifts have formed and every error compounded the growing frustration, causing only more issues."
The creator of the board game began refunding people's contributions after he canceled the project, but the FTC found that most people never got their money back.
This is the first instance of the FTC stepping into a crowdfunding campaign, and it hopefully sets a precedent that will deter future misuse of funds. There have been a lot of Kickstarter failures, and several suspicious campaigns, so it is good that the FTC is attempting to stop such wrongful spending.
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Now, however, the Federal Trade Commission has decided to take action in at least one of these cases. A 2012 Kickstarter for a board game called The Doom That Came to Atlantic City succeeded in raising over $120,000, significantly more than its $35,000 goal, but the creator of the game ended up using the money on personal expenses rather than making the game. After fourteen months, he abruptly canceled the project and didn't fulfill all of the backer rewards. Recently, the FTC decided that this violated the law and filed a complaint with a federal court. You can read the whole statement on the case here.
In a statement to backers, the creator explained, "From the beginning the intention was to launch a new board game company with the Kickstarted funds, with The Doom that Came to Atlantic City as only our first of hopefully many projects. Everyone involved agreed on this. Since then rifts have formed and every error compounded the growing frustration, causing only more issues."The creator of the board game began refunding people's contributions after he canceled the project, but the FTC found that most people never got their money back.
This is the first instance of the FTC stepping into a crowdfunding campaign, and it hopefully sets a precedent that will deter future misuse of funds. There have been a lot of Kickstarter failures, and several suspicious campaigns, so it is good that the FTC is attempting to stop such wrongful spending.
More...