FTC goes after Kickstarter gone wrong in first crowdfunding case #makerbusiness by @kansasalps @WashingtonPost


Game over: FTC goes after board game Kickstarter gone wrong in first crowdfunding case – The Washington Post.

…few, if any, supporters of the project ever received refunds, the FTC alleged in a complaint against Chevalier disclosed Thursday that accuses him of deceiving backers of the project. And instead of spending most of the funds raised through Kickstarter on making the game, he spent it on himself, the agency claimed. “In reality, Defendant never hired artists for the board game and instead used the consumers’ funds for miscellaneous personal equipment, rent for a personal residence, and licenses for a separate project,” the complaint said.

Chevalier has agreed to a settlement order with agency. Under the agreement, he’s prohibited from making misrepresentations about crowdfunding campaigns and failing to honor refund policies in the future. The order also contains a $111,793.71 judgment against Chevaliar, but it is suspended because of his inability to pay. “The full amount will become due immediately if he is found to have misrepresented his financial condition,” an FTC press release said. The Post was not able to immediately reach Chevalier, who did not admit guilt as part of the agreement.

But that doesn’t mean project creators can deceive consumers, according to the FTC. “Many consumers enjoy the opportunity to take part in the development of a product or service through crowdfunding, and they generally know there’s some uncertainty involved in helping start something new,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement about the Chevalier case. “But consumers should [be] able to trust their money will actually be spent on the project they funded.”

Read more.

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  1. Have you read about Kickstarter’s poor record in tech?

    [Quote] Of the 21 “most funded” projects in Kickstarter’s tech-heavy “design” category, a grand total of four appear to be currently available for sale. Of the top 12 “most funded” in Technology, four are available. Yes, many are available for “pre-order,” which is another way to say “we’ll take your money for a product that doesn’t exist yet.”

    These projects aren’t all new, either. ZionEyez took in $343,415 starting a full year ago and still hasn’t delivered a pair of heads-up camera sunglasses. Plenty of the projects have little updates explaining that oops, the products are taking longer to make than expected.

    Yes, this is heartbreaking, because many of the products look gorgeous. Many have prototypes. Many have had demos. I want some of them. I want to review some of them. But. They. Don’t. Exist. Just because you can build one of something doesn’t mean you can get proper quality control out of a factory line.

    A success rate of 33 percent is good for a venture capitalist, because actual investors expect to hit it big often enough to offset other losses. But when you give money to Kickstarter for a tech product, you’re not a real investor. Investors have equity. You’re just a buyer who isn’t getting your gadget for who-knows-how-long. The longer you don’t have the product, the less value your money had – and if you never get that product, well, remember, they don’t have to refund your money. [Endquote]


  2. 5 Kickstarter Projects Slammed With Success

    The article is really about five products that didn’t deliver.

    Read where it says, “complications”.


    It is harder for a company or individuals that aren’t established to make things happen for you. I’m not saying, “don’t invest in Kickstarter”. I’m just saying not to invest what you cannot afford to lose. I’ll give you an example. Write down your long term goals and write down the steps needed to accomplish them. How long will it take you to accomplish them? Are your steps specific enough? Do things come up preventing you from accomplishing them?

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