
Failed kickstarter ordered to pay restitution in court - colinmegill
http://www.polygon.com/2015/9/11/9310945/kickstarter-court-victory-attorney-general-washington-asylum-playing-cards
======
bahahah
They won't likely see the money either way. If it was spent on development it
is gone -- so if this a new company it will just file bankruptcy or dissolve.
Washington state does not likely have a way to force restitution on a company
in another state either.

True scammers will be long gone anyway, so this will only hurt people that
want to try to build something via crowdfunding.

Washington state is now considered hostile to businesses that will use
crowdfunding so you should probably not start these types of projects or
businesses there.

Will be interesting if any companies will refuse backers from Washington.

More careful wording of backer reward commitments can likely get around such
legal liabilities.

~~~
benwilber0
> Washington state is now considered hostile to businesses that will use
> crowdfunding

I think the WA AG is acting perfectly reasonably here and fully expect more
states to follow suit. The CPA applies to crowdfunding campaigns as much as it
applies to anything else.

------
funkysquid
I know that Kickstarter's policy supports this thinking, but I've always
disagreed.

The thing that made me excited about Kickstarter was people doing projects
crazy enough that you couldn't guarantee they'd be successful. I never got the
feeling that I was buying something, or that anything could be "crowdfunding
theft"'d from me. The whole point was that I was _giving_ to a creator to
hopefully make something cool.

This all goes away when you tell creators, "hey, you better know your dream
WILL work, because you'll be held legally and financially responsible for it
if it doesn't". It reduces Kickstarter to a platform for preorders, instead of
a place where crazy things can happen.

~~~
qbrass
You don't need to know that your dream will work. You need to offer people
rewards you can provide even if you fail.

That means, don't base your rewards on your dream succeeding, and fulfill your
obligations to your backers before spending their money on your dream.

------
benwilber0
Here's the cause of action text if anyone is interested (the complaint PDF
seems to have disappeared):

V. FIRST CAUSE OF ACTION - MISREPRESENTATIONS AND THE FAILURE TO DELIVER
REWARDS

5.1 Plaintiff realleges Paragraphs 2.1 through 4.17 and incorporates them
herein as if set forth in full.

5.2 In the context of operating the Asylum Playing Cards Kickstarter campaign,
Defendants engaged in the following acts or practices constituting unfair or
deceptive acts in trade or commerce:

a. Misrepresenting either directly or indirectly that Backers who paid for

Rewards through the Kickstarter Campaign would receive those Rewards In
approximately December 2012;

b. Failing to deliver the promised Rewards to Backers after the Backers paid
money to Defendants via the Kickstarter Campaign.

5.3 Defendants' practice of representing that Backers who paid for Rewards in
Defendants' Kickstarter campaign and then failing to subsequently deliver
those Rewards after Backers paid money to Defendants affects the public
interest and has the capacity to deceive a substantial number of consumers and
is an unfair or deceptive act or practice in trade or commerce and unfair
method of competition in violation of RCW 19.86.020.

VI. SECOND CAUSE OF ACTION - FAILURE TO REFUND 6.1 Plaintiff realleges
Paragraphs 2.1 through 4,17 and incorporates them herein as if set forth in
full.

6.2 In the context of operating the Asylum Playing Cards Kickstarter campaign,
Defendants engaged in the following acts or practices constituting unfair or
deceptive acts in trade or commerce:

a. Failing to provide refunds to Backers who requested one after they did not
receive their Reward in a timely fashion from Defendants' Kickstarter
Campaign;

b. Failing to offer refunds to any other Backer, whether a refund was
requested or not, after Defendants were unable to deliver the Rewards to any
backer within a reasonable timeframe.

6.3 Defendants' practice of failing to provide refunds to Backers of its
Kickstarter Campaign after the apparent failure of said Campaign affects the
public interest and has the capacity to deceive a substantial number of
consumers and is an unfair or deceptive act or practice in trade or commerce
and unfair method of competition in violation of RCW 19.86.020.

------
RIMR
So thats a total loss of $29,705. That's more than they ever raised!

That's fantastic news, because up until this there has been practically no
deterrent to running a crowdsourcing scam.

These guys got what they deserved.

~~~
bahahah
The proceeding is unlikely to change anything. The company will just dissolve.
Most of the big scams aren't even in U.S. Jurisdictions.

Only people being less ignorant and gullible will prevent them from being
scammed.

There might be a lawsuit against the crowdfunding sites, however their terms
are ironclad in the way they shed liability -- this is their lifeblood. Any
judgement will just result in slight rule or term changes. They are making
lots of money now and can afford the lawyers to remain free of liabilities.

------
benwilber0
would kickstarter itself be exposed to any liability in cases like this?

edit: I can't find the original court complaint so I can't find if it names
Kickstarter in addition to Altius.

~~~
bahahah
Doubtful. Their terms are explicit and iron clad. Make no mistake, they are
crafted to protect themselves first.

What group of backers would have the resources and organization to win a case
against the crowdfunding sites?

