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FTC Now Taking Action Against Kickstarter Campaigns With Misused Funds

FTC Now Taking Action Against Kickstarter Campaigns With Misused Funds

One of the biggest problems and risks with Kickstarter is that the people you fund don’t necessarily have to be good at using your funds. As a result, we see a lot of Kickstarter games end up being delayed because their creators didn’t budget properly or, worse, canceled all together. Even worse than that, some Kickstarters are just scams or particularly poor thought out projects from the get go. There have been several Kickstarters whose creators have ended up using their funds for personal expense, rather than for their intended purpose, and until now nothing has been tone to return this money to their rightful owners.

But the FTC has recently take action against at least one of these cases. The game in question is an infamous failed Kickstarter called The Doom That Came to Atlantic City . The Kickstarter raised over $120,000 dollars, far more than the $35,000 that it asked for, but the creator instead used the money on himself and never completed the game. He canceled the game after fourteen months and while he attempted to give some people their money back, most never received any refund.

The FTC’s complaint against the Kickstarter creator Erik Chevalier reads as follows:

According to the FTC’s complaint, Chevalier represented in his Doom campaign on Kickstarter.com that if he raised $35,000, backers would get certain rewards, such as a copy of the game or specially designed pewter game figurines.  He raised more than $122,000 from 1,246 backers, most of whom pledged $75 or more in the hopes of getting the highly prized figurines.  He represented in a number of updates that he was making progress on the game. But after 14 months, Chevalier announced that he was cancelling the project and refunding his backers’ money.

Despite Chevalier’s promises he did not provide the rewards, nor did he provide refunds to his backers. In fact, according to the FTC’s complaint, Chevalier spent most of the money on unrelated personal expenses such as rent, moving himself to Oregon, personal equipment, and licenses for a different project.

Under the settlement order, Chevalier is prohibited from making misrepresentations about any crowdfunding campaign and from failing to honor stated refund policies. He is also barred from disclosing or otherwise benefiting from customers’ personal information, and failing to dispose of such information properly. The order imposes a $111,793.71 judgment that will be suspended due to Chevalier’s inability to pay. The full amount will become due immediately if he is found to have misrepresented his financial condition.

FTC Now Taking Action Against Kickstarter Campaigns With Misused Funds

In short, this failed Kickstarter is like one big case of false advertisement. Hopefully we’ll see more justice for bilked Kickstarter backers in the future.

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