It’s the first time the consumer-protection agency has waded into the murky waters of crowdfunding.
It sounded fun enough: “The Doom That Came to Atlantic City,” its creators said, would be a “lighthearted Lovecraftian game of urban destruction, for two to four players.” Sort of like Monopoly, but with more destruction. The game’s inventors said they needed $35,000 to get the project off the ground, so they turned to crowdfunding—and, naturally, to Kickstarter. Online backers pledged a total of $122,874 in exchange for advance copies of the game, T-shirts, pewter figurines, and special crediting in the game’s eventual rule book.
But by 2013, a year after the project had been fully funded, the game’s makers—Portland-based The Forking Path, Co., run by Erik Chevalier—announced that their project had collapsed, and “The Doom That Came to Atlantic City” would never see the light of day.
Chevalier said he would return his money to his backers; the Federal Trade Commission (FTC) said Thursday that the unscrupulous crowdfunder actually used the board-game funds “on unrelated personal expenses such as rent, moving himself to Oregon, personal equipment, and licenses for a different project.” The consumer protection agency also reached a settlement [PDF] with the company: The would-be game-makers would have to return $111,793.71 to their online donors. (Chevalier agreed to the settlement without admitting guilt and says he cannot afford to pay.)
It’s the first time the FTC has waded into the murky waters of crowdfunding sites, though online scams on Kickstarter and its ilk abound. In 2013, the online platform stepped in and banned a project that promised to convert expensive Kobe beef to beef jerky after online Reddit tipsters raised questions about its legitimacy. Another: A Montreal project that raised over $350,000 to produce a machine to induce lucid dreaming was forced to return the money to its backers. In both cases, Kickstarter ensured that funders got their dollars (but not their beef jerky) back.
Still, Kickstarter’s policies put the onus for determining a project’s authenticity (and reliability) on its users. From the website’s FAQ section:
Kickstarter does not guarantee projects or investigate a creator's ability to complete their project. On Kickstarter, backers (you!) ultimately decide the validity and worthiness of a project by whether they decide to fund it.
On the other side of the coin, Kickstarter warns that creators “unable to satisfy the terms of this agreement … may be subject to legal action by backers.”
It’s an old tale, regulators scrambling to keep up with rapidly developing technology. Meanwhile, there’s a bittersweet end to this particular DOA tale of destruction in a declining East Coast metropolis. Reports the Washington Post:
[U]ltimately, backers of "The Doom That Came to Atlantic City" got at least some of what they paid for: Another company, Cryptozoic Entertainment, rescued the game after Chevalier announced its cancellation and gave all backers a copy. But not, the FTC said in its complaint, "the other, highly-prized deliverables, such as the promised pewter figurines" from the Kickstarter.