Kickstarter investors have funded some major pop-culture hits, from games like “Cards Against Humanity” to tech gadgets like the Pebble Time watch—and those companies have delivered on their promises.
However, not every Kickstarter project actually comes to life — and the U.S. Federal Trade Commission is showing it’s willing to wade into the murky crowdfunding waters to ensure customers aren’t getting duped. For the first time ever, the FTC is going after the founder of a Kickstarter campaign that failed to deliver on its promise, the Washington Postreports, implementing a fine and prohibiting any future misrepresentations.
The Kickstarter project in question was for a game called “The Doom That Came To Atlantic City.” The crowdfunding campaign launched on Kickstarter in May 2012, looking to raise $35,000 for a Monopoly-like game that allowed players to take on the role of villains created by the popular horror writer H.P. Lovecraft. In exchange for a $50 pledge, backers would a basic version of the board game, while larger pledges meant extra types of rewards. The campaign ended up raising $122,874 from more than 1,200 people.
However, the game never came to be. The company Forking Path was supposed to make the game, but the FTC says Erik Chevalier, who ran the company, spent money acquired through Kickstarter on unrelated projects. Chevalier canceled the Atlantic City project in June 2013 and said he wanted “to eventually refund everyone fully.”
According to Kickstarter’s terms, the deal between campaign creators and their backers is that if a project falls apart and can’t be delivered, then the creator is obligated to “refund any backer whose reward they do not or cannot fulfill.” Kickstarter is not responsible for the refunds.
However, few if any backers of the Atlantic City game ever saw their refunds, leading the FTC to lodge a complaint against Chevalier that accused him of deceiving backers. The agency and Chevalier agreed to a settlement whereby he’s prohibited from making misrepresentations about future crowdfunding campaigns and was fined $111,793.71. However, the fine has been suspended due to Chevalier’s “inability to pay,” the Post reports.