Washington State Sues Crowdfunder

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/

Advertisements

About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at: http://www.linkedin.com/pub/jeffrey-a-koeppel/0/63/5a9
This entry was posted in Congress, Crowd Fund Act, Crowd Fund Act of 2012, Crowd Funding At the Margins, Crowd Funding Platforms, Film, FINRA, Funding Portals, Investments, Jobs, Legislative Intent, SEC, Small Business and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.