The Doom That Came To Atlantic City is the first Kickstarter to face an FTC enforcement action - showing that the agency is finally addressing crowdfunding cases.
We live in a world where indie developers can turn to crowdfunding sites like Kickstarter to support their ideas, and in many cases that's been a fantastic thing. But it remains a new field that hasn't quite figured out how to respond when things go wrong, prompting the Federal Trade Commission to finally get involved. The FTC has launched its first enforcement action against a crowdfunded project - The Doom That Came To Atlantic City - for failing to provide refunds to backers.
The Doom That Came To Atlantic City first launched its campaign in 2012, proposing a tabletop game where players sent Lovecraftian monsters on a massive rampage. The project raised $122,874 - 350 percent over the original goal - but as of July 2013 the budget had run dry. "After paying to form the company, for the miniature statues, moving back to Portland, getting software licenses and hiring artists to do things like rule book design and art conforming the money was approaching a point of no return," game founder Erik Chevalier wrote at the time. "My hope now is to eventually refund everyone fully."
But today, an FTC complaint alleges that very few backers actually received their refunds. In fact, the complaint goes a step further to claim Chevalier spent the Kickstarter money on himself instead of supporting the game's development. "In reality, Defendant never hired artists for the board game and instead used the consumers' funds for miscellaneous personal equipment, rent for a personal residence, and licenses for a separate project," the complaint reads.
As it stands, Chevalier has agreed to a settlement with the FTC that prevents him from making misrepresentations about crowdfunding campaigns and failing to honor refunds in the future. The settlement order also includes a $111,793.71 judgement, which has been suspended until Chevalier's financial situation changes.
That all said, perhaps the biggest detail here is that the FTC is finally willing to get involved with crowdfunding disputes. Considering that The Doom That Came To Atlantic City wouldn't be the first game to fold after collecting backer funds, expect to see more cases like this in the future.
Source: Washington Post