Fraudulent Kickstarter Projects Will Be Targeted by the FTC

Have you ever contributed to a Kickstarter project only to realize that the creator never delivered on his promise? Well, it looks like the Federal Trade Commission is looking to target these fraudulent crowdfunding projects and make sure that their creators are punished accordingly. Now when I say “punish” I’m mainly referring to giving supporters their money back, which is what these people should be doing anyway. Naturally, there will be numerous cases when projects won’t be completed for genuine reasons, in which case the FTC won’t get involved.

Here’s a good example of when it will get involved, though. A project creator named Erik Chevalier managed to raise no less than $122,000 from 1,246 backers for a board game named “The Doom That Came to Atlantic City.” The Kickstarter project in question was eventually canceled, and while Erik promised that he would issue refunds to all of his backers, he never did. According to the commission’s report, he spent most of the money on personal matters such as moving to Oregon, paying rent, buying some equipment and purchasing licenses for different projects. The agency has already ordered Erik to refund all donations to backers, but they decided to suspend the order until they can access if he has any money left to give back.

The director of the FTC’s Bureau of Consumer Protection stated the following: “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. But consumers should be able to trust their money will actually be spent on the project they funded.”

I couldn’t agree more with that statement, but the truth is that we really need to be extra careful when we’re giving away our money to strangers over the internet, especially if we want to have a chance at a fair refund.

Thank you TheVerge for providing us with this information.

Image courtesy of Kickstarter.