FTC Decides Failed Crowdfunding Companies Are Responsible For Paying Back Customers

The Doom That Came To Atlantic City

The Federal Trade Commission has revealed details about a settlement regarding a failed crowdfunded project. The project, known as, The Doom That Came to Atlantic City, raised $122,874, but failed to be delivered to market.

Creators Lee Moyer and Keith Baker planned to manufacture and ship the Cthulhu-themed board game in 2013, but failed to meet their goal after manufacturer Erik Chevalier of Forking Path, was unable to complete the project.

In the settlement the FTC says Chevalier used the money on unrelated personal expenses, including paying rent, personal equipment, and licenses for a different project.

The settlement requires Chevalier to pay back the $111,793.71 given to him by the funders. The FTC writes:

“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.”

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In a direct warning to crowdfunding companies, the FTC posted several messages on Twitter.

 

The move sends a very direct messages to scammers and crowdfunding hopefuls who have not fully thought about how they will deliver their final product. To scammers, the FTC sends this very direct message.

Written by Peter Mondrose

Peter Mondrose

Peter Mondrose is the Editor-In-Chief at BusinessPundit. He received his degree in Economics in 1998 and a second degree in Journalism in 2004. He has served as a financial adviser, market trader, and freelance journalist for the last 11 years. When he's not investigating market conditions and reporting on workplace news, he can be found traveling with his wife, dog, and laptop. He can be reached at PeterMondrose@BusinessPundit.com or (929) 265-0240.