Bottom line: Crowdfunding campaigns can offer the promise of cool new technology but as backers of the iBackPack found out the hard way, supporting a project can be a risky proposition.
The Federal Trade Commission is investigating a crowdfunding project that raised more than $800,000 across multiple campaigns.
E-mail messages reviewed by The Verge indicate the FTC is reaching out to backers of the iBackPack, a tech-infused TSA-approved backpack claiming to offer built-in Wi-Fi, dozens of compartments, integrated batteries and more. It raised more than $720,000 on Indiegogo in 2015 and generated another $76,000 on Kickstarter the following year.
The last Kickstarter update on the project came in March 2017 (the first wave of products were supposed to ship in September 2016 but backers never received them). The iBackPack website no longer works and the pack’s creator, Doug Monahan, is reportedly nowhere to be found.
According to the publication, the name and number of the FTC employee cited in the e-mails is legitimate and the address it came from belongs to a .gov domain. Indiegogo wouldn’t comment on any potential investigation, nor would the FTC. Kickstarter, however, issued the following statement to The Verge regarding the matter:
“Last year we received and responded to a civil investigative demand from the FTC seeking information about this project,” a spokesperson said. “The vast majority of Kickstarter creators complete their projects as promised, but those who abuse our system and the trust of backers expose themselves to legal action.”
This wouldn't be the first time the FTC has investigated a crowdfunding project. In 2015, the commission settled a case against Erik Chevalier who ran a campaign for a board game based on Doom. He was ordered to repay nearly $112,000 but the judgement was suspended due to his inability to pay. According to the FTC, he spent most of the money raised on personal expenses.