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‘Kickstarter’ Backers May Get Protection from Project Scams, Courtesy of the Legal System

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Kickstarter
Kickstarter

It?s not surprising if a Kickstarter-funded project manages to start, but ends in failure, BIG TIME. But sometimes, regardless if the project actually pushes through or not, things get a bit hairy with the developers/creators who requested financial assistance from the people who helped fund them, and things get out of hand. The Best example is not getting what you are supposed to be given, after the project/game?s release. Things might change now, and backers may rest easier, thanks to Washington State Attorney General Bob Ferguson.

Why Ferguson? He?s just the guy who filed the ?first-ever? US consumer-protection lawsuit against crowdfunding. The category where Kickstarter falls into. The first one was filed against Altius Management and the owner, Edward Polchlepek. Their company raised more than $25,000 for having people play Asylum,? a card game. They simply failed in handing out ANY rewards or products to more than 800 of their backers, with 31 just around Washington.

Polchlepek and his company was supposed to produce decks of playing cards called Asylum. The irony of it, their Kickstarter video states that it would teach players to ?deceive? the mind. (Which seems to have ended up getting deceived themselves). ?After hitting their target of $15,000, nobody got their supposedly rewards. Not even a single piece of anything related to Asylum. This went on from December 2012 onwards.

Polchlepek, along with his company, is now going to be penalized ?a fee of $2,000 per violation. If he would be penalized for all the backers who failed to get their goods, the fee would go up to $1.6 million or so.

?Consumers need to be aware that crowdfunding is not without risk,? said the Attorney General. ?This lawsuit sends a clear message to people seeking the public?s money: Washington State will not tolerate crowdfunding theft. The Attorney General?s Office will hold those accountable who don?t play by the rules.?

Kickstarter may be able to defend Polchlepek at some point, due to its Terms of Use, which states that the date specified for the projects aren?t the promised release dates. It is just an estimate of when the project will be pushed out to the public. However, it also states there that creators need to fulfill their rewards to any backers, otherwise, this will hurt their credibility and worst case scenario, be involved in a legal situation.

This might change the future of the projects being developed under Kickstarter?s crowdfunding, and we can expect more results now, rather than facing the reality that only a small percentage of the projects in Kickstarter actually comes around.

Image Source: YouTube (Indy Mogul)

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