Technology

US tackles crowdfunding man who spent money on himself

Screengrab of game logo Image copyright Other
Image caption The board game involved monsters laying waste to Atlantic City

US regulators have taken legal action against a man who spent money raised via Kickstarter on himself.

In 2012, Erik Chevalier raised more than $122,000 (£79,000) to make a board game called The Doom That Came to Atlantic City.

The Federal Trade Commission (FTC) said much of the money raised went on rent, personal equipment and moving expenses.

In a settlement, Mr Chevalier agreed to honour refunds and to be honest in any future crowdfunding projects.

The legal action is believed to be the first against someone who misrepresented crowdfunding projects or misappropriated funds.

The Kickstarter appeal sought only to raise $35,000 but far exceeded this target because of the involvement of prominent game-makers and artists, said the FTC in a statement.

Order suspended

Despite Mr Chevalier providing regular updates, little work was done on the game's development and it was abruptly cancelled in mid-2013. Mr Chevalier cited his inexperience with making games and other "challenges" as the reasons for shutting down the project.

At the time he also pledged to refund backers but, said the FTC, no money changed hands. Instead the cash was used to support Mr Chevalier as he moved to Oregon and to help him get started on a separate project.

The settlement bars Mr Chevalier from misrepresenting any crowdfunding campaign he is involved with and from withholding refunds. It also imposes a repayment order of $111,793.71 that has been suspended because Mr Chevalier does not have enough money to repay it.

The FTC said the full amount would become due if it found that Mr Chevalier had more money than he currently claims to possess.

In its statement, the FTC said the legal action was part of a project to oversee novel ways that people can "store, share and spend" money.

Jessica Rich, director of the FTC's bureau of consumer protection, said crowdfunding sites such as Kickstarter and IndieGogo were proving popular and many people enjoyed backing new products and services.

But she said: "Consumers should be able to trust their money will actually be spent on the project they funded."

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