Indiegogo Signals Tougher Stance on Shady Campaigns, Will Do 'Everything in Our Power to Recover Funds'
The terms update includes several new requirements for campaign owners, such as providing frequent updates, certifying an address and insuring that any previous successful campaigns have been completed before starting new ones. The site reiterated that campaigns cannot be self-funded. Indigogo also updated its section on recovering funds, saying in "egregious" cases, it reserves the right to use a third-party collections service to recover funds for backers.
There have been several crowdfunding follies over the years, including ones for things like baby drones and a Scott Weiland Pledgemusic campaign in which fans of the late singer failed to receive their pledge gifts. One of the most notorious campaigns was for the Laser Razor, a futuristic shaving tool that raised over $4 million via Kickstarter before being banned because it didn't have a working prototype. (It later started a campaign on Indiegogo and raised over $500,000. A year, still no lasers in medicine cabinets.)
An independent analysis of Kickstarter conducted in 2015 found that 9 percent of projects failed to deliver on rewards, with 8 percent of pledge dollars going to failed projects. That said, the research -- conducted by U. of Pennsylvania -- found that 65 percent of backers said they received the reward on time.