Crowdfunding is a relatively new method for companies to raise money for various projects. Companies solicit donations for a project from a wide cross-section of the public, in exchange for some kind of reward. For example, a company might offer t-shirts, or bandanas, or even allow pre-orders of its product, in exchange for the donations. What happens, however, if the company fails to follow through with the reward it promised? Nashville-based Altius Management is finding out the hard way – the State of Washington is suing Altius under the state Consumer Protection Act for failure to deliver on its promises or offer refunds.
In 2012, Altius started a Kickstarter campaign to raise $15,000 to fund development of a playing-card game called Asylum. Altius actually raised more than $25,000, but apparently failed to follow through either by shipping merchandise to its funders, or by refunding the donations. Thirty-one of those funders live in Washington, and the state filed suit on their behalf earlier this month, alleging unfair and/or deceptive acts under the state Consumer Protection Act, and requesting up to $2000 in damages for each violation. Altius has not yet responded to the complaint.