Kickstarter has updated its terms of use to stipulate that "the creator must complete the project and fulfill each reward."
In the section titled "how projects work," kickstarter made it clear that creators who don't deliver their projects as promised have "failed to live up to the basic obligations of this agreement" and "may be subject to legal action by backers."
However, creators who fail to deliver "remedy the situation and meet their obligations to backers" by doing the following:
- they post an update that explains what work has been done, how funds were used, and what prevents them from finishing the project as planned;
- they work diligently and in good faith to bring the project to the best possible conclusion in a timeframe that’s communicated to backers;
- they’re able to demonstrate that they’ve used funds appropriately and made every reasonable effort to complete the project as promised;
- they’ve been honest, and have made no material misrepresentations in their communication to backers; and
- they offer to return any remaining funds to backers who have not received their reward (in proportion to the amounts pledged), or else explain how those funds will be used to complete the project in some alternate form.
Earlier this year, Washington State Attorney General Bob Ferguson filed a consumer protection lawsuit against Altius Management company for failing to deliver the promised rewards of its successfully-Kickstarted Asylum Playing Cards.