FTC takes first ever action against failed Kickstarter

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Failed Kickstarters, take note – not fulfilling your commitments is no longer consequence free.

The Federal Trade Commission in the US has for the first time taken action over a failed Kickstarter campaign – a board game called The Doom That Came to Atlantic City. In 2012 creator Erik Chevalier took to the crowdfunding platform to raise $35k. He got way more than that, too, eventually winning backing to the tune of $122,874.

The game had been due for release in November 2012. However, in July 2013 – more than a year after it had been successfully funded – Chevalier announced that it had been cancelled entirely. A promise of refunds never materialised, either, and what followed was two years of silence.

Kotaku reports that upon investigation the FTC found that 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”.

What the FTC can't do, however, is make Chevalier pay up for the $111,793 he owes backers because the cold hard truth is that he doesn't have the money.

Under the settlement order, Chevalier is prohibited from making misrepresentations about any crowdfunding campaign and from failing to honour stated refund policies,” it said. He is also barred from disclosing or otherwise benefiting from customers' personal information, and failing to dispose of such information properly.”

As it happens, a third party eventually acquired the rights to the game, gave a free one to backers and now has it available to buy on Amazon.

Kickstarter last year amended its T&Cs to warn creators that failure to fulfil their promises could result in legal action.

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