Crowd-funding platform Kickstarter is quite popular these days, especially for people who want to launch a product, a career in filmmaking or a musi album, all looking for their big break and someone to back their dreams.  The platform helps you turn your dreams into reality by presenting your project to the public, and letting the masses decide whether it’s worth funding.

People can back a project by pledging as little as a dollar or as much as a few thousand bucks.  But what happens when you fund a project and the person behind it decides not to push through with it?  What happens to your money?  Will you get a refund?

NPR recently did a story on Julie Uhrman, the brains behind Ouya, a hackable gaming console, and how it was getting started with a project on Kickstarter.  The interview then came to pretty interesting topic, “Would you have to give money back to your backers if you weren’t able to deliver?”

To which Uhrman answered, “Technically, from the Kickstarter perspective, I actually don’t know the answer to that.  But from a doing-the-right-thing perspective, we will treat our backers the best possible way.”

So the point is, even if you get your project successfully funded and you get a lot of money for it, it’s still up to you if you want to push through with your project.  What an easy way get rich, if you don’t have a conscience.

But the question raises an important point, gaining the attention of Kickstarter, as they do not want backers to lose trust in people who want to get their projects funded on the platform.

Kickstarter accountability

Since Kickstarter started in 2009, over 30,000 projects have been successfully funded but the company does not deny that there are some instances that Kickstarter users fail to deliver due to unforeseen circumstances, such as finalizing complicated projects or they get overwhelmed with the project at hand.  Still, the question remains, what happens when a creator fails to deliver?

Here are just some questions that Kickstarter addressed in their blog post and added to their FAQ page:

Does Kickstarter screen projects before they launch?

Yes, they do review projects but only to make sure they meet Kickstarter’s Project Guidelines.  They do not investigate a creator’s ability to complete their project.  So it’s up to the backers if they think a project is really worth funding.

Who is responsible for completing a project as promised?

The project creator, the person who presented the project, is the one responsible for completing the project as Kickstarter is not involved in the development of projects.

What should creators do if they’re having problems completing their project?

Creators should inform backers by posting a Project Update to explain what’s happening.  When you invest on something, you’d always want to be updated to what’s happening with it and silence from the creators would be unnerving for backers.  Also, its quite common to hit a wall or a series of unfortunate events so it’s better to be upfront about it about to your backers.  If you’re honest and transparent, backers are more likely to be understanding and not hunt you down with a pitchfork.

Are creators legally obligated to fulfill the promises of their projects?

Yes, though Uhrman make it sound like creators can just dupe backers, Kickstarter’s Terms of Use require creators to fulfill all rewards of their project or refund any backer whose reward they do not or cannot fulfill.  Creators see this page before their project is launched to remind them of their obligations. Kickstarter made these terms to create a legal requirement for creators to follow through on their projects, and to give backers a recourse if they don’t.

Can Kickstarter refund the money if a project is unable to fulfill?

No, Kickstarter doesn’t issue refunds because they never get to hold on to the money.  The transactions are between between backers and the creator and when a project is successfully funded, money is transferred directly from backers’ credit cards to the project creator’s Amazon Payments account.  So the creator is the only one who can issue a refund.

Those are just some bits and pieces regarding how Kickstarter works, if you want to learn more about the company, go to their FAQ and Project Guidelines pages.  But based on the answers, it seems like a backer can still be duped if they fund a project on Kickstarter since the responsibility of refunding backers still lies in the hands of project creators.  So fund wisely and do your due diligence!