Earn rewards for supporting a project
you believe in? That’s what “crowdfunding” is all about.
Here’s how it works: “Creators” think
of projects. To pay for those projects, they ask for small amounts of money
from lots of people, usually through online platforms like Kickstarter or
Indiegogo. Often, creators offer rewards to contributors. So far, so good … as
long as the creators keep their end of the bargain.
The FTC just
settled its first crowdfunding case against a creator who didn’t keep his
promises. According to the FTC, Erik Chevalier, using the name “The Forking
Path Co.,” said he was raising money to create a board game called “The Doom
That Came to Atlantic City.” He promised that he’d use the money to make the game.
He also promised specific rewards for contributing – like an early version of
the game or pewter game figurines.
Can you guess what’s
coming? Right. He never made the board game. He never sent rewards.
And he never gave consumers their money back.
The FTC’s
complaint says that Chevalier’s promises were deceptive. The case offers a
classic lesson in consumer protection law: when you make a promise, you have to
deliver.
How can you avoid crowdfunding frauds
like this? Check out the creator’s background and reviews:
·
Has the creator
launched other products successfully?
·
Has the creator
supported other projects?
·
What does the
creator promise?
Some crowdfunding
platforms encourage their creators to follow best practices.
If you learn about a crowdfunding
scam:
·
File a complaint with
the Federal Trade Commission.
·
File a complaint
with your state Attorney General.
·
Warn other
consumers — comment on the creator’s profile on the crowdfunding site.
No comments:
Post a Comment