Crowdfunding Scams UpDate: ERIK CHEVALIER scammed contributors out of more than $122,000


May 15, 2016 Facebook Twitter LinkedIn Google+ MLM & Affiliate Marketing News



Crowdfunding Scams UpDate: ERIK CHEVALIER scammed contributors out of more than $122,000

Crowdfunding Scams Are on the Rise

In its first case involving crowdfunding, the Federal Trade Commission has taken legal action against the deceptive tactics of a project creator who raised money from consumers to produce a board game through a Kickstarter campaign, but instead used most of the funds on himself. The defendant has agreed to a settlement that prohibits him from deceptive representations related to any crowdfunding campaigns in the future and requires him to honor any stated refund policy.

Similar ‘Scampaigns’

Similar fraud “scampaigns” were unveiled after the fact on sites such as Kickscammed, Facebook’s GoFraudMe page, and Android Police:

  • Jen Hintz is accused of using the $26,000-plus raised on Kickstarter for FibroFibers, an indie yarn-dyeing business, to fund her move from North Carolina to Massachusetts.
  • The project founders of Kreyos Meteor smartwatch made off with $1.5 million raised on Indiegogo for a waterproof, voice-activated wearable device that could also track your sleep.
  • An Iowa woman raised thousands of dollars through GoFundMe to pay for her daughter’s cancer treatments, when in fact the child was healthy.

While Leetha Kaye Slauson, the Iowa woman, was given five years’ probation, other penalties amount to little more than a slap on the wrist. Under the FTC settlement, Chevalier is prohibited from making misrepresentations about future crowdfunding projects, is barred from disclosing or benefiting from customers’ personal information, and was fined $111,793.71, which was suspended due to Chevalier’s inability to pay.

Read the full article and join in the discussion over at consumerreports.org

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