Not every crowdfunded project is going to result in a product: This much is a given. But the State of Washington took one such project to court—and won.
According to the Washington State Office of the Attorney General, Altius Management, which sought funding to produce its Asylum Playing Cards, will have to pay $54,851 in fines and restitution. That includes $23,183 in court and attorney fees, #31,000 in fines, and a $668 payout to the 31 Washington residents who contributed to the project.
The project, a set of specially designed playing cards, raised over $25,000 in pledges from 810 backers. The funding period for the project wrapped up in October 2012, and Altius told backers to expect their rewards (basically, thank-you gifts for pledging) in December of that year.
According to the attorney general’s press release, backers never received their rewards, and “the company has not communicated with its backers since July 2013.” Altius also never offered refunds to its backers.
Kickstarter’s terms of service require creators of successfully funded projects to “complete the project and fulfill each reward.” If that isn’t possible for some reason, creators “must make every reasonable effort to find another way of bringing the project to the best possible conclusion for backers,” according to Kickstarter.
The court made its judgement back in July—the Internet noticed the ruling only in the last few days—and a quick check of the comments made to the project’s Kickstarter page indicates that at least some backers finally began receiving their promised decks over the summer.
While Washington State’s move to take Altius to court was a first, that state’s government isn’t the only regulatory entity that’s taken on unfulfilled crowdfunding efforts. The Washington Post reported back in June that the FTC filed a complaint against another company that cancelled its crowdfunded project without providing rewards or offering refunds to backers.
This story, "Crowdfunded company ordered to pay up after failing to deliver the goods" was originally published by PCWorld.