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First-ever FTC Kickstarter settlement, against a game campaign

First-ever FTC Kickstarter settlement, against a game campaign

June 11, 2015 | By Christian Nutt

The Federal Trade Commission has announced its first-ever settlement with the creator of a crowdfunding campaign gone wrong.

As part of the settlement, Erik Chevalier, who ran a successful campaign for a board game called The Doom That Came To Atlantic City! in 2012, has been hit with a number of sanctions: He must protect and appropriately dispose of his backers' personal information; he must not misrepresent himself in crowdfunding campaigns in the future; there's also a monetary judgment against him which comprises the lion's share of the $122,874 he raised.

Chevalier announced the termination of the project in 2013; he also promised backers he'd refund their money, but the FTC says that he, instead, used the raised funds for personal expenses and another project.

Later the same year, the game's designers, Lee Moyer and Keith Baker, partnered with Cryptozoic Entertainment, which published The Doom That Came to Atlantic City! commercially in 2014. 

The settlement also puts Chevalier on the hook for $111,793.71 -- which was suspended, because he lacks the funds to pay out the money. (If that turns out not to be true, however, the government will collect that amount.) This being the case, it seems likely this is a message to other campaigners: In the case of a fraudulent campaign, "we'll take that money back," the FTC is saying.

"Many consumers enjoy the opportunity to take part in the development of a product or service through crowdfunding, and they generally know there’s some uncertainty involved in helping start something new. But consumers should be able to trust their money will actually be spent on the project they funded," Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, said in a statement.

Correction: Clarified that the game did eventually ship commercially via Cryptozoic Entertainment.

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