Federal regulators sue man they say raised $122K through crowdfunding, then broke his promises

Associated Press

Federal regulators are going after people who raise money online through crowdfunding sites like Kickstarter and GoFundMe but don't follow through on their promises.

In its first case involving crowdfunding, the Federal Trade Commission announced Thursday that it has settled charges against a man who raised $122,000 through Kickstarter to produce a board game that never materialized. According to the FTC, Erik Chevalier canceled the project and said he would refund the donations, but used the money instead to pay his rent and move.

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The settlement may be a warning to online scammers. But it also reveals the limits to which the government can protect consumers: Chevalier has been ordered to repay the money, but the judgment is suspended because he doesn't have any.