Kickstarter: Crystal Wash
A Case of Unjust Enrichment?
In his response to Joanie Lemercier who called him out on the deceptive marketing and misinformation on the Holus project, Kickstarter CEO, Yancey Strickland continues with his same rhetoric:
Ultimately, it’s backers who decide what gets funding, not us
Kickstarter places the onus on backers to vet projects; Kickstarter has a responsibility to act in good faith, ensuring they keep their end of the bargain.
What happens when Kickstarter fails the basics?
During their Kickstarter funding period from 01/26/2015–03/13/2015, Crystal Wash successfully raised $268,368 from 3706 backers.
In 45 days, Kickstarter earned a commission of $13418 or $298/day.
According to a 2012 blog post, Kickstarter takes accountability very seriously and screens projects before they launch to ensure they meet project guidelines.
There are three rules every Kickstarter project must follow.
- Projects must create something to share with others.
- Projects must be honest and clearly presented.
“Our community is built on trust and communication. Projects can’t mislead people or misrepresent facts, and creators should be candid about what they plan to accomplish.”
3. Projects can’t fundraise for charity, offer financial incentives, or involve prohibited items.
“We’re all in favor of charity and investment, but they’re not permitted on Kickstarter. Projects can’t promise to donate funds raised to a charity or cause, and they can’t offer financial incentives like equity or repayment. We also can’t allow any of these prohibited things.”
Did Kickstarter earn their commission?
Kickstarter claims to take accountability very seriously; it is fair and reasonable for backers to expect Kickstarter to keep the promises they have repeatedly committed to.
Projects must be honest and clearly presented.
Marketing copy on the Kickstarter home page for Crystal Wash asserted:
“ Crystal Wash is something that works and the truth is we really can make doing laundry easier for you, save you money and be better for the environment.”
In 1999, the FTC issued a press release detailing their successful settlement that charged marketers of laundry detergent substitutes with making false and unsubstantiated claims:
“These companies appealed to consumers’ desire to help the environment and save some money,” said Jodie Bernstein, Director of the FTC’s Bureau of Consumer Protection. “Today, on Earth Day, many consumers will be looking for green products and may believe these products are better for the environment. Before tossing out their tried and true detergents, consumers should think twice. Tests show that these gadgets do little more than clean out your wallet. At best, they’re marginally better than washing clothes in hot water alone, and not as effective as washing them with laundry detergent. At worst, the products are completely useless.”
The claims made by those marketers in 1999 bear a striking resemblance to those made by Crystal Wash; several sites published articles about this alleged scam including Gizmodo, Reddit, Digital Trends and the Register UK. All referenced the lack of substantiation of claims and the 1999 FTC decision .
Many backers voiced concerns about the veracity of the claims citing specifics which debunk the marketing claims made. Kickstarter did nothing.
When Kickstarter fails to do their job.
Projects can’t involve prohibited items.
On 03/13/2015, the same day funding closed, Crystal Wash project Creator clarified a material fact stating:
Crystal Wash was developed by a group of Korean Scientists and we were approached by their company to market the product. We studied all of all their scientific documentation done on their product proving its efficacy, which were conducted by reputable third party sources such as: The Hong Kong Polytechnic University; ATS Applied Technical Services, Incorporated; SGS Testing & Control Services Singapore; Korea Polymer Testing & Research Institute (KOPTRI), Ltd.; and Katri Washing & Cleaning Technology Research Center.
Kickstarter prohibits projects that the creator did not make, except when they don’t. At least these marketers did their homework and read the scientific documentation.
According to Kickstarter Stats, to date they have successfully collected 1.58 billion from funded projects. Over the past 5 years, the Kickstarter commission equals 79 million.
With deceptive marketing and scams running rampant on Kickstarter, there sure seems like a hell of a conflict of interest going on.
