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By his logic wouldn't Kickstarter be illegal? Many KS projects charge users before making a product (they use Amazon to process the payment, but the user's credit card is still charged, which may very well be a Visa). I think this is a little silly.

I mentioned a reply to that as a parent above. The difference is the way Kickstarter presents the projects and the terminology they use. They are not asking for pre-orders, they are asking for pledges, and have a very clear disclaimer in the top right about what that means. If the product page itself were to claim that they were pre-orders for a product that couldn't ship yet, then it as well could potentially be violating card agreements as well as the rule from the FTC.

In Finland, crowdfunding concepts are actually illegal for that reason.

If you're collecting money without selling something, you need a license from the authorities. To get a license, you need to be a registered charity.

You can't just say "we'll probably use your donation to build something you might like and may send you one when it's ready".

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