WASHINGTON (AP) - Federal regulators are going after people who raise money online through crowdfunding sites like Kickstarter and GoFundMe but don't follow through on their promises.
In its first case involving crowdfunding, the Federal Trade Commission announced Thursday it has settled charges against a man who raised $122,000 through Kickstarter to produce a board game that never materialized. According to the FTC, Erik Chevalier canceled the project and said he would refund the donations, but used the money instead to pay his rent and move.
Crowdfunding has become a popular way to donate money directly to someone in need, from independent filmmakers to do-gooders. The donations are often small, ranging from a couple bucks to a couple thousand dollars.
In one case in Los Angeles, a man's crowdfunding campaign received $60,000 in less than a month after posting a YouTube video showing how he built a tiny, $500 wooden house on wheels for a homeless woman in his neighborhood. In another case, a Maine man who wanted to donate his kidney to a stranger after seeing a sign in a car window raised $49,000 to defray medical costs.