Washington State’s Attorney General filed a lawsuit against a crowdfunder who raised over $25,000 from 810 backers on Kickstarter and failed to deliver the promised product for more than 16 months.
The AG calls this “crowdfunding theft.” In other words, if you take money from people on the promise of delivering a product and don’t, that’s fraud.
The article says that: “The Attorney General’s office is seeking restitution for consumers, as much as $2,000 per violation of the Consumer Protection Act in civil penalties, and money to cover the state’s costs and attorneys’ fees.”
Kickstarter’s terms of service say that a crowdfunder is legally responsible for delivering on its product promise. If you post on Kickstarter, you have entered into a binding contract for which you are legally liable to fulfill.
The charges include “misrepresentation,” “failure to refund after requests,” and “unfair or deceptive trade practices.”
You can read the AG’s complaint at the end of this article: http://www.geekwire.com/2014/attorney-general-asylum-playing-cards-crowdfunded-project/