Global Startup

An $800,000 USD crowdfunding scam is under investigation

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Although crowdfunding projects might seem like a dream come true for both entrepreneurs and consumers, there is a rising trend int he amount of projects that fail to deliver on their promises.

A product called the “iBackPack” is under investigation of the Federal Trade Commission of the United States, after having raised $800,000 USD and then disappearing without a trace.

A Los Angeles based brand, the iBackPack was meant to be an all-mighty backpack with over 50 compartments, WiFi hotspots, USB ports, batteries, and many more unbelievable features.

Because of its lavish promises and clever marketing, hundreds of people backed the product on two separate campaigns held both on Indiegogo on 2015 and Kickstarter on 2016. The minimum backing amount was $249.

After delaying the release of the product for months, it became clear that the company might have not have had the best intentions. The Federal Trade Commission started reaching out to backers to confirm whether or not they had received the product. The investigation has been ongoing since 2017.

The last crowdfunding campaign investigated by the FTC was a boardgames campaign that raised $122,00 in 2015, and also suddenly disappeared.

The repeating instances of fraud will hopefully increase security measures of crowdfunding websites to ensure that consumers are supporting trustworthy projects.

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