Failed kickstarter ordered to pay restitution in court

They won't likely see the money either way. If it was spent on development it is gone -- so if this a new company it will just file bankruptcy or dissolve. Washington state does not likely have a way to force restitution on a company in another state either.

True scammers will be long gone anyway, so this will only hurt people that want to try to build something via crowdfunding.

Washington state is now considered hostile to businesses that will use crowdfunding so you should probably not start these types of projects or businesses there.

Will be interesting if any companies will refuse backers from Washington.

More careful wording of backer reward commitments can likely get around such legal liabilities.

I know that Kickstarter's policy supports this thinking, but I've always disagreed.

The thing that made me excited about Kickstarter was people doing projects crazy enough that you couldn't guarantee they'd be successful. I never got the feeling that I was buying something, or that anything could be "crowdfunding theft"'d from me. The whole point was that I was giving to a creator to hopefully make something cool.

This all goes away when you tell creators, "hey, you better know your dream WILL work, because you'll be held legally and financially responsible for it if it doesn't". It reduces Kickstarter to a platform for preorders, instead of a place where crazy things can happen.

Here's the cause of action text if anyone is interested (the complaint PDF seems to have disappeared):

V. FIRST CAUSE OF ACTION - MISREPRESENTATIONS AND THE FAILURE TO DELIVER REWARDS

5.1 Plaintiff realleges Paragraphs 2.1 through 4.17 and incorporates them herein as if set forth in full.

5.2 In the context of operating the Asylum Playing Cards Kickstarter campaign, Defendants engaged in the following acts or practices constituting unfair or deceptive acts in trade or commerce:

a. Misrepresenting either directly or indirectly that Backers who paid for

Rewards through the Kickstarter Campaign would receive those Rewards In approximately December 2012;

b. Failing to deliver the promised Rewards to Backers after the Backers paid money to Defendants via the Kickstarter Campaign.

5.3 Defendants' practice of representing that Backers who paid for Rewards in Defendants' Kickstarter campaign and then failing to subsequently deliver those Rewards after Backers paid money to Defendants affects the public interest and has the capacity to deceive a substantial number of consumers and is an unfair or deceptive act or practice in trade or commerce and unfair method of competition in violation of RCW 19.86.020.

VI. SECOND CAUSE OF ACTION - FAILURE TO REFUND 6.1 Plaintiff realleges Paragraphs 2.1 through 4,17 and incorporates them herein as if set forth in full.

6.2 In the context of operating the Asylum Playing Cards Kickstarter campaign, Defendants engaged in the following acts or practices constituting unfair or deceptive acts in trade or commerce:

a. Failing to provide refunds to Backers who requested one after they did not receive their Reward in a timely fashion from Defendants' Kickstarter Campaign;

b. Failing to offer refunds to any other Backer, whether a refund was requested or not, after Defendants were unable to deliver the Rewards to any backer within a reasonable timeframe.

6.3 Defendants' practice of failing to provide refunds to Backers of its Kickstarter Campaign after the apparent failure of said Campaign affects the public interest and has the capacity to deceive a substantial number of consumers and is an unfair or deceptive act or practice in trade or commerce and unfair method of competition in violation of RCW 19.86.020.

So thats a total loss of $29,705. That's more than they ever raised!

That's fantastic news, because up until this there has been practically no deterrent to running a crowdsourcing scam.

These guys got what they deserved.

would kickstarter itself be exposed to any liability in cases like this?

edit: I can't find the original court complaint so I can't find if it names Kickstarter in addition to Altius.