Ever since Kickstarter launched its crowdfunding platform, it was long believed that backers had to bear the risks of supporting projects. The company itself made clear early on that it isn't liable for damages or loss relating to "rewards or any other use of the service," and many backers have been burned without recourse. That is, until now.
Washington State Attorney General Bob Ferguson today filed a suit against Ed Nash and his Nashville, Tenn.-based company Altius Management for failing to deliver to backers the products they had been promised.
Nash's Kickstarter campaign for Asylum Playing Cards launched in September 2012 and raised $25,146 of a $15,000 goal from 810 backers, at least 31 of whom are from Washington. The campaign promised backers rewards like decks of cards, signed and authenticated sketches and custom art.
The estimated delivery date for the backer rewards was Dec. 2012, but the deadline passed and, more than a year later, backers still have not received a thing.
The lawsuit claims that Nash and his company breached Kickstarter's Terms and Conditions wherein project creators are "legally bound to fulfill backer rewards if funding is successful." Nash is accused of engaging in practices "constituting unfair or deceptive acts in trade and commerce," like misrepresenting either directly or indirectly that backers who paid for rewards through the Kickstarter campaign would receive those rewards in approximately Dec. 2012 and failing to deliver the promise rewards.
The Attorney General's office is seeking as much as $2,000 in restitution for consumers for each violation of the Consumer Protection Act, as well as money to cover the state's costs and legal fees.
"Consumers need to be aware that crowdfunding is not without risk," Ferguson said in a statement. "This lawsuit sends a clear message to people seeking the public’s money: Washington state will not tolerate crowdfunding theft. The Attorney General’s Office will hold those accountable who don’t play by the rules."
"Tens of thousands of incredible projects have been brought to life through Kickstarter. We want every backer to have an amazing experience, and we're frustrated when they don't," a Kickstarter spokesperson told Polygon. "We hope this process brings resolution and clarity to the backers of this project."
We have reached out to Altius Management for comment.
Altius Management isn't the first Kickstarter campaign to fail to deliver backer rewards to financial supporters on time. Backers of Code Hero, a video game that raised more than $170,000 of a $100,000 funding goal, remain in the dark. The estimated delivery date for their rewards was Feb. 2012. Neal Stephenson's Clang also hit a snag, missing its Feb. 2013 delivery deadline. The project is currently on hiatus.