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One of the largest Kickstarter scams just ran off with the money. $3.4 million.

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Comments

  • FrammshammFrammshamm Member UncommonPosts: 322
    Waterlily said:
    http://arstechnica.com/business/2015/11/after-raising-record-3-4m-on-kickstarter-uk-drone-startup-collapses/

    Company promised drones

    $3.4 million in funding

    only 600 of the more than 15,000 Zano drones ordered were shipped

    they say they are bankrupt, they ran off with over 3 million dollars



    Be careful if you invest large sums of money in games like MMO.

    Kickstarter will not protect you in any way when the people simply run off with the money.




    Kickstarter says they hold no responsibility:


    Of course kickstarter has no liability. Thats like suing Goodwill for someone abusing your donated clothes and furniture. Its not kickstarter's fault you failed to research the destination of your charity. This is not an investment regulated by the SEC. Maybe it should be, maybe we should be arguing that we ARE acting like capital investors. The point is, currently,, we are not, and no one has had the balls to make that case yet.
  • DistopiaDistopia Member EpicPosts: 21,183
    Iselin said:
    Distopia said:
    Iselin said:
    Distopia said:
    Iselin said:
    CrazKanuk said:
    Waterlily said:
    I don't really understand the excuses people are using. It's not a donation, donations are given in good faith, to non-profit charitable causes. It's not patronage either.

    No one expects to get any return on a donation, I don't expect anything in return when I give to a good cause. But there is an expectation that these people are getting something in return, they are buying these drones, or are told they are.

    You can't claim your site is simply about donations, when you are promising a trade. "Pledge X money and you receive Y". That's not a donation, that's a trade. You're setting up a sale.

    I agree that giving money to Kickstarter is gullible, but that doesn't make what Kickstarter does justifiable.


    Is there an expectation that they will be getting something in return? Is this really the case? I certainly do see many people who DO expect that whatever they back will be produced. However, are they ignorant to the process? The risk? What more could be done to educate people of this risk? I think that crowdfunding has received it's fair share of negative press to this point. At what point does the responsibility fall to the consumer? I mean Kickstarter has been around for over 5 years now. 

    I think that you're right and wrong at the same time. There is, obviously, many who are gullible when it comes to Kickstarter. However, there are others who are quite well-informed on the subject and choose to put their money at risk in hopes of seeing a product materialize. At this point I don't believe that the onus is on Kickstarter to inform people, I think that the onus is on the consumer to be more educated. So, yes, people complaining about it have every right to complain about it, but if that wasn't a known risk, then the issue is with their own education than with the model itself. 
    The problem as I see it is that they are influenced through the marketing and presentation to think that they are indeed making a purchase. The confusion about what exactly it is that they're getting into is created deliberately to maximize crowdfunding income.

    And it's not like everyone is interested in the same type of KS project. So there will always be a supply of potential new-to-KS customers that are attracted to some niche product.

    It's not like many (any?) KS campaigns emphasize the risk of getting nothing and having no recourse when they're asking for money. 
    Problem is in actual law ignorance is no ground to argue from... if they don't understand, that's on them for not taking the time to understand.
    Yeah it's not like I haven't heard victims of scams getting blamed before lol.... "they should have known better" sort of lets the con man off the hook don't you think?

    I know that consumer protection laws and regulations are not too popular with some posters around here but they're there for a reason. That being that society in general doesn't buy the "should have known better" argument as the end of the matter.
    I didn't blame people for being victims of scams, scams have nothing to do with what I said really, I'm just pointing out how the law views the subject of ignorance.
    But I wasn't talking about legal recourse was I? My post was about how the confusion about what it is that you're actually doing is deliberately created because, obviously, being up front and transparent about the risk is not something they want to do.

    You're the one that brought up the ignorance of the law bit
    Because in the end it depends on how the law views this, not how we do..

    For every minute you are angry , you lose 60 seconds of happiness."-Emerson


  • SlothnChunkSlothnChunk Member UncommonPosts: 788
    Burntvet said:
    Quirhid said:
    Its a donation. Its certainly not a purchase or an investment.
    Nope. Not a donation either...it's patronage.  Donations (in the U.S) are tax deductible, come with legal protections and are regulated actively by the government.

    So crowd sourcing would be in the same category as someone who goes on one of those 'sugar daddy / sugar baby' websites.
    Except that in the US at least, some State courts are finding that "in practice", some crowdfunding efforts are no different than doing a pre-order for a product. And in such a case, consumer rights attach.

    If it looks like a pre-order, and functions like a pre-order (i.e. like ordering and paying for a car that has not been manufactured yet, which is a fairly common example), then it is a pre-order, no matter what someone tries to call it.

    So, according to the courts, it is not a donation, and it is not "patronage". (And frankly, theirs is the only opinion that matters.)

    It is a "pre-order", and someone that pays for a pre-order is a customer.


    Not sure where you get your information, but the only state to go after a Kickstarter project on consumer rights was Washington.  And in that case the Kickstarter project violated the very specific State of Washington Consumer Protection Act and constituted "unfair or deceptive acts or practices in trade or commerce."

    The ruling only applied to residents of the State of Washington as jurisdiction didn't apply elsewhere.  So even in that case only a fraction got their money back since the vast majority of backers didn't reside in Washington State.

    So what 'courts' are you referring to?  Do you have sources because in the above case the very specific law only applied to one state.  In the end only 31 backers out of nearly 1,000 got their money back.  So even in that extremely rare Kickstarter case less than 4% ever go their money back.
  • IselinIselin Member LegendaryPosts: 18,719
    Distopia said:
    Iselin said:
    Distopia said:
    Iselin said:
    Distopia said:
    Iselin said:
    CrazKanuk said:
    Waterlily said:
    I don't really understand the excuses people are using. It's not a donation, donations are given in good faith, to non-profit charitable causes. It's not patronage either.

    No one expects to get any return on a donation, I don't expect anything in return when I give to a good cause. But there is an expectation that these people are getting something in return, they are buying these drones, or are told they are.

    You can't claim your site is simply about donations, when you are promising a trade. "Pledge X money and you receive Y". That's not a donation, that's a trade. You're setting up a sale.

    I agree that giving money to Kickstarter is gullible, but that doesn't make what Kickstarter does justifiable.


    Is there an expectation that they will be getting something in return? Is this really the case? I certainly do see many people who DO expect that whatever they back will be produced. However, are they ignorant to the process? The risk? What more could be done to educate people of this risk? I think that crowdfunding has received it's fair share of negative press to this point. At what point does the responsibility fall to the consumer? I mean Kickstarter has been around for over 5 years now. 

    I think that you're right and wrong at the same time. There is, obviously, many who are gullible when it comes to Kickstarter. However, there are others who are quite well-informed on the subject and choose to put their money at risk in hopes of seeing a product materialize. At this point I don't believe that the onus is on Kickstarter to inform people, I think that the onus is on the consumer to be more educated. So, yes, people complaining about it have every right to complain about it, but if that wasn't a known risk, then the issue is with their own education than with the model itself. 
    The problem as I see it is that they are influenced through the marketing and presentation to think that they are indeed making a purchase. The confusion about what exactly it is that they're getting into is created deliberately to maximize crowdfunding income.

    And it's not like everyone is interested in the same type of KS project. So there will always be a supply of potential new-to-KS customers that are attracted to some niche product.

    It's not like many (any?) KS campaigns emphasize the risk of getting nothing and having no recourse when they're asking for money. 
    Problem is in actual law ignorance is no ground to argue from... if they don't understand, that's on them for not taking the time to understand.
    Yeah it's not like I haven't heard victims of scams getting blamed before lol.... "they should have known better" sort of lets the con man off the hook don't you think?

    I know that consumer protection laws and regulations are not too popular with some posters around here but they're there for a reason. That being that society in general doesn't buy the "should have known better" argument as the end of the matter.
    I didn't blame people for being victims of scams, scams have nothing to do with what I said really, I'm just pointing out how the law views the subject of ignorance.
    But I wasn't talking about legal recourse was I? My post was about how the confusion about what it is that you're actually doing is deliberately created because, obviously, being up front and transparent about the risk is not something they want to do.

    You're the one that brought up the ignorance of the law bit
    Because in the end it depends on how the law views this, not how we do..
    Yeah but in the beginning (as in deciding to fund or not fund something) it depends precisely on how we view it. And how we view it is being manipulated to make it seem like it's something, a purchase, that it's not.

    KS is a very clever no risk scheme for getting money from people under, if not false, at the very least obscured pretenses. Every single marketing campaign for one reads like a sales pitch for a product or service... just don't forget to read the fine print.
    "Social media gives legions of idiots the right to speak when they once only spoke at a bar after a glass of wine, without harming the community ... but now they have the same right to speak as a Nobel Prize winner. It's the invasion of the idiots”

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  • BurntvetBurntvet Member RarePosts: 3,465
    edited November 2015
    Burntvet said:
    Quirhid said:
    Its a donation. Its certainly not a purchase or an investment.
    Nope. Not a donation either...it's patronage.  Donations (in the U.S) are tax deductible, come with legal protections and are regulated actively by the government.

    So crowd sourcing would be in the same category as someone who goes on one of those 'sugar daddy / sugar baby' websites.
    Except that in the US at least, some State courts are finding that "in practice", some crowdfunding efforts are no different than doing a pre-order for a product. And in such a case, consumer rights attach.

    If it looks like a pre-order, and functions like a pre-order (i.e. like ordering and paying for a car that has not been manufactured yet, which is a fairly common example), then it is a pre-order, no matter what someone tries to call it.

    So, according to the courts, it is not a donation, and it is not "patronage". (And frankly, theirs is the only opinion that matters.)

    It is a "pre-order", and someone that pays for a pre-order is a customer.


    Not sure where you get your information, but the only state to go after a Kickstarter project on consumer rights was Washington.  And in that case the Kickstarter project violated the very specific State of Washington Consumer Protection Act and constituted "unfair or deceptive acts or practices in trade or commerce."

    The ruling only applied to residents of the State of Washington as jurisdiction didn't apply elsewhere.  So even in that case only a fraction got their money back since the vast majority of backers didn't reside in Washington State.

    So what 'courts' are you referring to?  Do you have sources because in the above case the very specific law only applied to one state.  In the end only 31 backers out of nearly 1,000 got their money back.  So even in that extremely rare Kickstarter case less than 4% ever go their money back.
    There have already been initial filings in at least NY, CA, and one of the southern States. A couple have already made it past preliminary hearings.

    The FTC has also said in multiple releases that they are looking at various cases of crowdfunding fraud, but I an not sure if they have filed yet or not.

    I am not sitting in front of a WesLaw terminal so I can't say specifically.

    So whatever the status atm, more cases are coming.


    Edit: and the point is not how many people did or did not get their money back, it is that the court classified them as de facto customers, to whom consumer rights attached. Not donors, not patrons, customers.
  • scorpex-xscorpex-x Member RarePosts: 1,030
    They didn't promise anything, people donated so buyer beware.

    I'm glad this happened because people are stupid, they need a few kicks up the ass to learn their lesson.
  • SlothnChunkSlothnChunk Member UncommonPosts: 788
    edited November 2015
    Burntvet said:
    Burntvet said:
    Quirhid said:
    Its a donation. Its certainly not a purchase or an investment.
    Nope. Not a donation either...it's patronage.  Donations (in the U.S) are tax deductible, come with legal protections and are regulated actively by the government.

    So crowd sourcing would be in the same category as someone who goes on one of those 'sugar daddy / sugar baby' websites.
    Except that in the US at least, some State courts are finding that "in practice", some crowdfunding efforts are no different than doing a pre-order for a product. And in such a case, consumer rights attach.

    If it looks like a pre-order, and functions like a pre-order (i.e. like ordering and paying for a car that has not been manufactured yet, which is a fairly common example), then it is a pre-order, no matter what someone tries to call it.

    So, according to the courts, it is not a donation, and it is not "patronage". (And frankly, theirs is the only opinion that matters.)

    It is a "pre-order", and someone that pays for a pre-order is a customer.


    Not sure where you get your information, but the only state to go after a Kickstarter project on consumer rights was Washington.  And in that case the Kickstarter project violated the very specific State of Washington Consumer Protection Act and constituted "unfair or deceptive acts or practices in trade or commerce."

    The ruling only applied to residents of the State of Washington as jurisdiction didn't apply elsewhere.  So even in that case only a fraction got their money back since the vast majority of backers didn't reside in Washington State.

    So what 'courts' are you referring to?  Do you have sources because in the above case the very specific law only applied to one state.  In the end only 31 backers out of nearly 1,000 got their money back.  So even in that extremely rare Kickstarter case less than 4% ever go their money back.
    There have already been initial filings in at least NY, CA, and one of the southern States. A couple have already made it past preliminary hearings.

    The FTC has also said in multiple releases that they are looking at various cases of crowdfunding fraud, but I an not sure if they have filed yet or not.

    I am not sitting in front of a WesLaw terminal so I can't say specifically.

    So whatever the status atm, more cases are coming.



    There are investigations all the time.  That's the job of certain state agencies and the FTC.

    But, again, only one very specific case was found to break the law (a State's law not Federal) and less than 4% of backers ever got their money back.  And the FTC only went after a single case which they claimed was outright fraud.  That case ended in settlement where the Kickstarter project admitted no guilt and ended up repaying a grand total of $0 because all funds were gone.

    You won't be able to come up with your so called list of other cases because they haven't and won't be prosecuted.  And the reason is crowdfunding/Kickstarter are patronage.  Patronage isn't protected under the law with only the one very very specific case from Washington State as the lone exception.

    The facts simply don't match your opinion.  That's because it would be a nightmare to try to enact and enforce laws dealing with the funding of concepts and ideas.  And that's why after all these years of Kickstarter with dozens of failed projects not returning a single cent you don't even need a full hand worth of fingers to find Kickstarter projects that were actually prosecuted.
  • tawesstawess Member EpicPosts: 4,227
    Also a lot of people seem to miss the whole thing that for something to be a fraud there have to be A... FREAKING... INTENT... Just being a moron that can´t complete high-school math or manage a budget is not the same as having a intent to defraud or scam people... Being a moron is not against the law in it self... We can argue it should be.. But it is not. 

    So unless new facts come to light... This is just a bunch of people with more heart than brains trying to live their dream. 

    Always keep in mind that every project on kickstarter is either someone who could not figure out a way to get real funding.. or was rejected for real funding... Sometimes that happens for a very good reason. 

    This have been a good conversation

  • DistopiaDistopia Member EpicPosts: 21,183
    Distopia said:

    I didn't blame people for being victims of scams, scams have nothing to do with what I said really, I'm just pointing out how the law views the subject of ignorance.
    Is it a scam if the project leader intentionally lied on his KS page?
    The key word there is intentional, if you're intentionally misleading folks, you're essentially scamming them so yes... why ask such questions?

    For every minute you are angry , you lose 60 seconds of happiness."-Emerson


  • SeelinnikoiSeelinnikoi Member RarePosts: 1,360
    Sorry but... after all the Kickstarter warnings of people running away with money... I can only say:

    If you are a Star Wars fan, why not try the Star Wars The Old Republic?
    New players can get a welcome package and old/returning players can also get a welcome back package and 7 days free subscription time! Just click here to use my referral invitation
  • waynejr2waynejr2 Member EpicPosts: 7,771
    Distopia said:
    Distopia said:

    I didn't blame people for being victims of scams, scams have nothing to do with what I said really, I'm just pointing out how the law views the subject of ignorance.
    Is it a scam if the project leader intentionally lied on his KS page?
    The key word there is intentional, if you're intentionally misleading folks, you're essentially scamming them so yes... why ask such questions?

    And they also need to know that intending to build a game and failing isn't intending to mislead.
    http://www.youhaventlived.com/qblog/2010/QBlog190810A.html  

    Epic Music:   https://www.youtube.com/watch?v=vAigCvelkhQ&list=PLo9FRw1AkDuQLEz7Gvvaz3ideB2NpFtT1

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    Kyleran:  "Now there's the real trick, learning to accept and enjoy a game for what it offers rather than pass on what might be a great playing experience because it lacks a few features you prefer."

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    FreddyNoNose:  "A good game needs no defense; a bad game has no defense." "Easily digested content is just as easily forgotten."

    LacedOpium: "So the question that begs to be asked is, if you are not interested in the game mechanics that define the MMORPG genre, then why are you playing an MMORPG?"




  • BurntvetBurntvet Member RarePosts: 3,465
    edited November 2015
    Burntvet said:
    Except that in the US at least, some State courts are finding that "in practice", some crowdfunding efforts are no different than doing a pre-order for a product. And in such a case, consumer rights attach.
    Burntvet
    If it looks like a pre-order, and functions like a pre-order (i.e. like ordering and paying for a car that has not been manufactured yet, which is a fairly common example), then it is a pre-order, no matter what someone tries to call it.

    So, according to the courts, it is not a donation, and it is not "patronage". (And frankly, theirs is the only opinion that matters.)

    It is a "pre-order", and someone that pays for a pre-order is a customer.


    Not sure where you get your information, but the only state to go after a Kickstarter project on consumer rights was Washington.  And in that case the Kickstarter project violated the very specific State of Washington Consumer Protection Act and constituted "unfair or deceptive acts or practices in trade or commerce."

    The ruling only applied to residents of the State of Washington as jurisdiction didn't apply elsewhere.  So even in that case only a fraction got their money back since the vast majority of backers didn't reside in Washington State.

    So what 'courts' are you referring to?  Do you have sources because in the above case the very specific law only applied to one state.  In the end only 31 backers out of nearly 1,000 got their money back.  So even in that extremely rare Kickstarter case less than 4% ever go their money back.
    There have already been initial filings in at least NY, CA, and one of the southern States. A couple have already made it past preliminary hearings.

    The FTC has also said in multiple releases that they are looking at various cases of crowdfunding fraud, but I an not sure if they have filed yet or not.

    I am not sitting in front of a WesLaw terminal so I can't say specifically.

    So whatever the status atm, more cases are coming.



    There are investigations all the time.  That's the job of certain state agencies and the FTC.

    But, again, only one very specific case was found to break the law (a State's law not Federal) and less than 4% of backers ever got their money back.  And the FTC only went after a single case which they claimed was outright fraud.  That case ended in settlement where the Kickstarter project admitted no guilt and ended up repaying a grand total of $0 because all funds were gone.

    The facts simply don't match your opinion.  That's because it would be a nightmare to try to enact and enforce laws dealing with the funding of concepts and ideas.  And that's why after all these years of Kickstarter with dozens of failed projects not returning a single cent you don't even need a full hand worth of fingers to find Kickstarter projects that were actually prosecuted.

    Perhaps.

    But the thing you don't seem to understand is it takes time for the courts to react to anything new. That there have been few cases yet means nothing.

    Why? Because something "actionable" actually has to happen, and there has to be criminal conduct and/or civil liability before the courts can do anything. Then someone has to file a complaint. Then some agency has to start investigating that complaint.

    It has only been a few years since "crowdfunding" became popular so it is just about right for cases to start hitting the courts now. The courts are always slow to respond to new circumstances, but they always catch up eventually.

    The other thing you don't seem to understand is that there do not NEED to be any new laws put in place to enforce anything. Virtually every US State has consumer protection laws that would do the job, not counting the UCC on the federal side.

    The law deals with "what is". Not what someone calls something, or is or is not supposed to do or be. This gives rise to the ultra-common "If it walks like a duck" (unofficial) standard that is used in every court.

    For many KS/crowdfunded efforts, the "commercial activity" is no different on its face, than a customer pre-ordering and pre-paying for a product. Period. As such, it is not a donation or patronage or anything else, despite what it is called. That is a very small fig leaf a lot of these companies have been hiding behind, and it is not going to last. This is so both on the basis of consumer rights laws, and the fact that the various localities are getting screwed out of tax revenue based on the "donation" fallacy.


    So we will see who is right in the long term, but it is probably not going to be you.




    Post edited by Burntvet on
  • MoiraeMoirae Member RarePosts: 3,318
    That's why you NEVER give large sums of money to ANY kickstarter. 
  • ArChWindArChWind Member UncommonPosts: 1,340
    CrazKanuk said:
    Thorkune said:
    It seems like I've heard and old saying: A fool and his money are soon parted.

    I have not, nor ever will I ever donate to these kickstarters. People get scammed and then they are shocked?!

    You do know what the term "scam" means, right?

    Yeah, some of us kind of got a good idea of what a scam is. For example using deception to gain money such as making things appear as they aren't.

    In this case there is just bad management of funds and unrealistic goals so people lost money. The bad news is that KS is becoming a new pulpit of anti capitalism for the pocket liners.

    I said it before and I'll say it again.

    KS + MMO = PERFECT fraud

    ArChWind — MMORPG.com Forums

    If you are interested in making a MMO maybe visit my page to get a free open source engine.
  • GeezerGamerGeezerGamer Member EpicPosts: 8,857
    Wizardry said:
    mgilbrtsn said:
    Kickstarter doesn't have any responsibility.  They merely provide the means by which to donate.  If you can't risk the money, don't donate.  It's as simple as that.  I fund kickstarters that I hope to succeed.  If one goes belly up, I am fully prepared.  I don't donate anything I can't afford.  
    Well that is why we have laws,to make sure people don't try and cheat/steal from others.
    If some charity was found stealing all the money,the law would step in.It is called misrepresentation.

    I can use an example that was happening right in front of my eyes for years.Some people would make up large jars and put a picture of some missing child in them to get people to donate to the cause.Now you could say well don't donate unless you need the money but the law stepped in and people were jailed.

    What still bothers me to this day is when i see developers somehow getting around the law running operations that claim "Donations".We all know that is total rubbish,they are not donations,the game is SELLING you items,you are buying those items and the developer is using that money as profits.

    Also imo Kickstarter should not be Scott free from the law,they are running a PROFIT making business and should be 100% under full scrutiny of the law.It is like these illegal movie operations,they claim they are only a file storage operation but they know full well what  is going on and the law DOES intervene often.Pirate Bay was the most notable offender who ended up in prison and is likely still there.

    http://www.today.com/style/police-beauty-queen-lied-about-having-cancer-scam-donors-t38471
  • l2avisml2avism Member UncommonPosts: 386


    Notice how the drone-cam shots were all fake? (some guy holding a camera)
  • KiyorisKiyoris Member RarePosts: 2,130
    This is why banks never give you large sums of money without collateral. You are liable, if you can't pay back your loan, they come take your house.

    I don't understand people still spending money on kickstarter, the system itself is a scam.
  • KiyorisKiyoris Member RarePosts: 2,130
    edited November 2015
    Also, $3.5 million. It was a small team of a handful of people.

    Everyone probably took $500.000 and is now laughing at all the people who gave them money, probably from their new mansion in the cote d'asure.
  • Pestis87Pestis87 Member UncommonPosts: 11
    @l2avism everything in this video looks fake ;s
    image
  • l2avisml2avism Member UncommonPosts: 386
    Kiyoris said:
    Also, $3.5 million. It was a small team of a handful of people.

    Everyone probably took $500.000 and is now laughing at all the people who gave them money, probably from their new mansion in the cote d'asure.
    That's not really enough. A normal house cost more than $200k. Even a really large house in a normal neighborhood would cost more than 500k.
    Like most plebeians that run into money quickly, it will all be gone within months.
  • EzxistenceEzxistence Member CommonPosts: 15
    Next up star scamitizen
  • PhaserlightPhaserlight Member EpicPosts: 3,075
    I don't get why people get upset. This is no different than the risk that a big venture capital firm takes when they invest in a startup. You need to do your homework, like a VC,  and make sure you are investing in a solid company that can produce a viable product. 
    Minus the advanced degrees, the professional certifications, state of the art algorithms...

    Expecting Joe Internet User to even be in the same ballpark as a VC when it comes to deciding whether or not to invest in a startup is... quixotic? Quixotic... let's go with that.

    "The simple is the seal of the true and beauty is the splendor of truth" -Subrahmanyan Chandrasekhar
    Authored 139 missions in Vendetta Online and 6 tracks in Distance

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