Washington state files first ever lawsuit over failed Kickstarter campaign

May 1, 2014, 4:33 PM | Updated: 5:34 pm

Ever wonder what happens to companies that raise money on Kickstarter but don’t deliver on what they promised? If you mess with people in Washington state, the attorney general will come after you.

In what’s the first consumer protection lawsuit in the nation involving crowdfunding, Washington State Attorney General Bob Ferguson today sued Ashville, Tenn.-based Altius Management and its founder Edward J. Polchlepek, otherwise known as Ed Nash.

Nash raised $25,146 from 810 backers in October 2012 – including at least 31 from Washington – for a playing card game called Asylum pushed on Kickstarter.

Project backers were promised the playing cards and other rewards with an estimated delivery date of December 2012. Ferguson says to date, the project has not been completed and none of the backers have received any of the promised items or any refunds. Nash and the company haven’t communicated with donors since July 2013.

Kickstarter’s terms of use make clear that companies are legally obligated to fulfill the promised rewards or provide consumer refunds.

“Consumers need to be aware that crowdfunding is not without risk,” said Ferguson. “This lawsuit sends a clear message to people seeking the public’s money: Washington state will not tolerate crowdfunding theft. The Attorney General’s Office will hold those accountable who don’t play by the rules.”

The case is being handled by Assistant Attorney General Jake Bernstein, who tells KIRO Radio he’s had a few failed Kickstarter campaigns of his own and wondered what happens when a company doesn’t deliver.

“I started talking to people on Kickstarter and asked if there were any straightforward failures to deliver,” he says.

Bernstein says he got a tip from a donor who didn’t receive what was promised, and decided to pursue Nash when he learned of his failed campaign.

“The money went somewhere. So he got a lump sum from all of these backers and there’s no excuse why they didn’t get their cards,” Nash says.

While the case is the first involving a crowdfunding campaign, Bernstein says the legal principles are no different than any other failure to deliver action. He says the goal is ultimately to get Nash to fulfill his obligation and produce and deliver the cards, or provide a refund to all the donors.

Kickstarter issued the following statement in response to the suit:

Tens of thousands of incredible projects have been brought to life through Kickstarter. We want every backer to have an amazing experience, and we’re frustrated when they don’t. We hope this process brings resolution and clarity to the backers of this project.

Local News

Whatcom County...
MyNorthwest Staff

Sumas residents urged to evacuate, National Guard expected in Whatcom County on Sunday

The Washington State National Guard has been pre-deployed in Whatcom County ahead of this weekend’s projected storm systems.
2 days ago
police, Lake City seattle...
KIRO 7 News Staff

Person seriously injured in shooting Friday inside Tacoma Mall

A person is in serious conditions after they were shot in the middle of the Tacoma Mall food court on Friday.
3 days ago
Sawant recall...
Dalton Day

A recall Sawant PAC has been released from campaign contribution limit

The Washington State Public Disclosure Commission has released a recall Councilmember Kshama Sawant PAC from its campaign contribution limits.
3 days ago
hand sanitizer...
Dalton Day

COVID-era artifact, emergency-produced hand sanitizer, comes to an end for local distillery

Copperworks Distilling Company has been ordered to shut down its manufacturing of hand sanitizer, which provided critical health care supplies.
3 days ago
COVID variant...
Charlie Harger

‘Bellwether bond’ down over COVID-variant concerns, ‘sending strong signal,’ says local analyst

Analyst Mike Alfstad of Seattle's Alfstad Capital clarifies how the newly identified COVID variant has affected the 10-Year Treasury yield.
3 days ago
holidays, seattle, christmas lights...
MyNorthwest Staff

24 things to do in Seattle for the holidays

There's plenty to do in and around the greater Seattle region to help spread holiday cheer through December and into the new year.
3 days ago

Sponsored Articles

...
Experience Anacortes

Coastal Christmas Celebration Week in Anacortes

With minimal travel time required and every activity under the sun, Anacortes is the perfect vacation spot for all ages.
...

Delayed-Onset PTSD: Signs and Symptoms

Lakeside-Milam Recovery Centers SPONSORED — You’re probably familiar with post-traumatic stress disorder. Often abbreviated as PTSD, this condition is diagnosed when a person experiences a set of symptoms for at least a month after a traumatic event. However, for some people, these issues take longer to develop. This results in a diagnosis of delayed-onset PTSD […]
...

Medicare open enrollment ends Dec. 7. Free unbiased help is here!

Washington State Office of the Insurance Commissioner SPONSORED — Medicare’s Open Enrollment Period, also called the Annual Election Period, is Oct. 15 to Dec. 7. During this time, people enrolled in Medicare can: Switch from Original Medicare to a Medicare Advantage plan and vice versa. Join, drop or switch a Part D prescription drug plan, […]
...

How to Have a Stress-Free Real Estate Experience

The real estate industry has adapted and sellers are taking full advantage of new real estate models. One of which is Every Door Real Estate.
...
IQ Air

How Poor Air Quality Is Affecting Our Future Athletes

You cannot control your child’s breathing environment 100% of the time, but you can make a huge impact.
...
Swedish Health Services

Special Coverage: National Prostate Cancer Awareness Month

There are a wide variety of treatment options available for men with prostate cancer. The most technologically advanced treatment option in the Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform.
Washington state files first ever lawsuit over failed Kickstarter campaign