DailyDirt: Avoid Crowdfunding Scams

from the urls-we-dig-up dept

Some crowdfunding projects are really impressive and have gotten a lot of attention and praise that is well deserved. However, there are also quite a few projects that haven't quite lived up to their promise. It's disappointing to say the least when a project gets over a million bucks and still fails to deliver a working product to its backers. Some backers get upset when their favorite crowdfunded project sells out to Facebook. How can companies like Kickstarter and Indiegogo and the like deal with these problems? There might be escrow schemes or insurance policies that could help, but in the end, it seems like buyer beware is the ultimate answer. Here are just a few links on this situation of dealing with crowdfunding disappointments and outright scams.

• Indiegogo is trying out an optional insurance feature that would provide a refund if the project fails to deliver its product within 3 months of its estimated delivery date. So far, this insurance policy is in testing and costs $15, so it doesn't apply to every (or even many) campaign on Indiegogo, but it's an interesting way to provide backers with some kind of guarantee that their faith/money is not being completely misplaced. However, it looks like only 3 people have tried it, and we'll have to wait until early 2016 to see if those folks will qualify for a insurance claim. [url]
• Kickstarter is generally seen as dominant crowdfunding platform, and the company behind it wants to be known as a responsible corporation. Will being named a Certified B Corporation boost Kickstarters reputation at all? Or will its certification simply be taken away if more backers are dissatisfied when projects don't deliver as promised? [url]
• It's not hard to find crowdfunding projects that just won't work.. because physics or the second law of thermodynamics. Maybe crowdfunding platforms need to crowdsource some peer review for a project approval process? [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post via StumbleUpon.

Filed Under: buyer beware, certified b corporation, crowdfunding, crowdsourcing, customer service, escrow, insurance, reputation, scams
Companies: indiegogo, kickstarter