FTC settles with creator of failed Kickstarter

The doom that came to Kickstarter

Chevalier claimed that after forming a company, paying for software licenses and hiring artists, there was no money left over.On June 6, 2012, the Kickstarter crowdfunding campaign for The Doom That Came To Atlantic City came to an end. Overall, the campaign had raised $122,874, much higher than the original goal of $35,000. The campaign was for a board game that mixed the Chthulu mythos with Monopoly, and the gaming community was excited.

But, on July 23, 2013, there was an announcement from one of the creators, Erik Chevalier, that the game was canceled. Chevalier claimed that after forming a company, paying for software licenses and hiring artists, there was no money left over.

The FTC steps in

After the cancellation of the project, the Federal Trade Commission filed a complaint against Chevalier. The complaint alleged that most of the money was spent on personal expenses for Chevalier, including a move to Portland, along with other expenses and licenses unrelated to the Doom game.

Now, the government has come to a settlement with Chevalier over the failed Kickstarter. According to reports, the settlement requires that Chevalier:

  • never again makes misrepresentations about any crowdfunding campaign or fails to honor stated refund policies;
  • never discloses or otherwise benefits from customers’ personal information, or fails to dispose of such information properly; and
  • must pay a $111,793.71 judgment.

That judgment, however, has been suspended based on Chevalier’s inability to pay (meaning he doesn’t have to pay it – sorry, consumers). If it is determined that Chevalier has lied about his dire financial situation, though, he will be on the hook for that money.

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This is justice?

Well, there you have it. The first resolution to a government action spurred by a failed Kickstarter project.

Anyone feel any better?

A spokesperson from the FTC said that “onsumers should able to trust their money will actually be spent on the project they funded.”It’s a perfect storm, really. The money has all been spent and the creator is basically bankrupt. There’s just nothing left to get from him.

A spokesperson from the FTC said that “onsumers should able to trust their money will actually be spent on the project they funded.” I suppose that the threat of government action and potential legal action from spurned backers could serve as a deterrent to future screwups like this.

So what can be done?

Not much.

Kickstarter commented on the settlement, pointing out that “Kickstarter creators have an incredible track record when it comes to following through on their promises.” They also reiterated the fact that failure to deliver on those promises exposes a creator to legal action.

However, as I said on a recent podcast segment on The Dice Tower, legal action isn’t really worth the effort in most cases. A broke creator and a $122,000 total liability isn’t going to get a class action attorney excited. An individual’s total investment isn’t usually more than the cost of filing a small claims action. It just isn’t worth it to take legal action.

So I’ll say it again – like walking into a casino, don’t put more money into a Kickstarter project than you can bear to lose. It’s not a perfect solution, but I believe that Kickstarter is an amazing thing in the aggregate. A few bad projects shouldn’t sour the world on the benefits of crowdfunding, which have brought many games to life that otherwise wouldn’t have existed.

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Plus, there are a ton of great creators on there, including Stonemaier Games (who I write guest posts for occasionally). Check out their Kickstarter Lessons blog for an A-Z course in how not to mess up your Kickstarter.

And take a hint from Google – Don’t be evil. Because the FTC might get ya.

Some good news: In the meantime, Cryptozoic Entertainment has stepped in and published the game, providing a copy to each of the jilted backers. However, the other promised extras, such as figurines, were not manufactured.

For those who are venturing into beginning a Kickstarter campaign, why not consult with a game lawyer, as well? If you want to know more about some of the major issues that game developers face, sign up and get my two FREE eBooks about gamedev legal issues. Lastly, check out the front page for my new site that will allow developer to generate the contracts they need within an indie studio’s budget.

photo credit: Cell Block, Cuffs6, and Cuffs1 via photopin (license)

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