The iBackPack crowdfunding campaign is reportedly under investigation by the Federal Trade Commission, after it raised more than $700,000 but has not yet kept its promise.
The iBackPack is just one of many crowdfunding fails. However, it looks like the FTC has renewed interest in upholding justice for backers, or the people who give money to supposedly help transform innovative ideas into actual products.
FTC Investigates iBackPack Crowdfunding Campaign
Crowdfunding campaigns for the iBackPack were launched on Indiegogo in 2015 and on Kickstarter in 2016. The backpack's creator, Doug Monahan, said that the iBackPack will provide Wi-Fi connections and will come with battery packs to charge electronic devices while on the go.
The idea was a great one, and the iBackPack raised over $700,000 across Indiegogo and Kickstarter. However, years later, the iBackPack has not yet shipped. Some backers received "beta" accessories, including batteries and cables, but that was some time ago, and nowhere near the promised product. The official iBackPack website, meanwhile, has been taken down.
iBackPack backers have told The Verge that they have started receiving emails from an FTC agent regarding the failed crowdfunding campaign. The agent, who introduces himself as from the commission's Bureau of Consumer Protection, seeks to confirm that backers have not received the iBackPack. The agent adds that the FTC is looking to prevent further fraud from happening in crowdfunding platforms.
The investigation has been confirmed to be a legitimate one, but it is not certain what the end goal will be, such as whether the FTC will pursue legal action against Monahan.
Crowdfunding comes with certain risks, as it is not as simple as buying something online. Pledges made by backers are investments, not purchases, so the FTC will need to prove that the people behind the campaigns planned to run away with the money or abandoned projects without announcing it.
Major Crowdfunding Fails
One of the most infamous crowdfunding fails in history is the Zano drone, as the project collapsed after raising $3.5 million. The company behind the Zano drone, Torquing Group, apologized to its 12,000 backers, and attempted to explain how all that money was spent. A succeeding report by journalist Mark Harris revealed that Ivan Reedman, the man who started Torquing Group, found out that his team did not possess the necessary knowledge or skills to create the Zano drone after he had already marketed it.
A more recent example of crowdfunding gone bad is System Shock, a much-anticipated reboot that raised $1.3 million but was placed in hiatus.