Posted on May 5, 2014, Ron Whitaker Card Designer Who Failed to Deliver Kickstarter Rewards Sued
The Washington State Attorney General has filed suit against a card game developer who failed to deliver on his Kickstarter rewards.
In September of 2012, Nashville-based Altius Management started a Kickstarter campaign to fund the development of a retro-horror themed playing card deck called Asylum Playing Cards. After raising $25,146, far more than their $15,000 goal, it seemed that the project would be another Kickstarter success story.
Unfortunately, that was not the case. Despite an expected delivery date of Dec. 2012, the promised rewards have still not been delivered. In response to this failure, the Washington State Attorney General’s office has filed a lawsuit against Altius and its president, Ed Nash, on behalf of 31 backers who lived in Washington at the time they backed the project.
The suit (you can read the complaint here) alleges that Altius and Nash breached the terms and conditions set forth by Kickstarter for project creators. According to those terms, creators are “legally bound to fulfill backer rewards if funding is successful.” It goes on to accuse Nash of engaging in practices “constituting unfair or deceptive acts in trade and commerce.”
Furthermore, the second cause of action in this suit mentions Altius’ failure to provide refunds to those customers who requested them. The suit seeks up to $2,000 in civil penalties for each violation, and also asks to have all legal fees and court costs covered by the defendant. It also asks that the court mandate restitution to consumers as part of its judgement.
Obviously, there is a long way to go in resolving this suit, but its outcome may have some far-reaching effects on Kickstarter and crowdfunding. If Altius is held financially liable for failing to deliver, other devs may shy away from crowdfunding for fear of gaining funding but being unable to fulfill either rewards or refunds. Kickstarter’s response to this case so far has been fairly boilerplate. A spokesperson for the crowdfunding site told Polygon,
“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. We hope this process brings resolution and clarity to the backers of this project.”
Even if devs don’t develop doubts about crowdfunding, the backers may. A visit to the comments of the Altius Kickstarter page reveals backers talking about contacting the Washington Attorney General in hopes of forming a class action suit, as well as several calling for more aggressive action from Kickstarter itself. Here are a couple of selected comments:
“I’m hoping that this case becomes precedent for going after or getting KS involved. I understand the need to limit liability but I’ve lost hundreds of $$ on this site to frauds and liars and it’s time they step up to protect their costumers.”
“Twice I asked KS Admin to get involved, twice I got the mandatory shrug off “sorry, can’t do a thing” response. That is irresponsible. You don’t provide a service, cream off a cut, and then turn your back on what’s going on while you count the cash earned from that cut. I may not get my money back, as I’m a UK resident, but I wish the prosecution and the Washington crew all the best. If anything comes out of this, I hope there’s better governance and protection for future backers and creators too, from the people who run this site.”
The long and short of it is this: Kickstarter remains a crap shoot, and I wouldn’t blame you if you quit using it (like I did). After all, tracking website Kickscammed reports that over $1.5 million in reported Kickstarter scams have been reported so far. However, if this court case ends up going against Altius, it could change the whole dynamic of Kickstarter. If one attorney general is successful, it could spur more suits. More suits could result in FTC regulation of crowdfunding, which could be a very interesting development to the entire Kickstarter dynamic.
For now, we’ll keep an eye on this case, and we’ll keep you posted on any new information that comes our way.