Law Catching Up To Kickstarter

In what is, to our knowledge, the first enforcement action against a company which raised Kickstarter money and then failed to deliver any of the promised rewards, the Washington State attorney general announced on May 5, 2014 that it had filed a complaint for consumer fraud against Edward Polchlepek and his company Altius Management. The defendants raised over $25,000 from over 800 contributors for a playing card game (and other rewards) which was to be delivered in December, 2012. Nothing was ever delivered to the Kickstarter contributors.

Potential damages are over $1.6 million (at a fraud penalty of $2,000 per consumer).

There have been a number of instances where contributors to crowdsourced funding on a donation model have not received promised rewards. The Kickstarter website warns that it is not responsible for delivery of promised benefits, and to our knowledge, to date those who have complained have been out of luck. In one example, in 2012, a creator of