FTC sues iBackPack, says agency spent crowdfunding {dollars} on private objects

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ibackpack

The promised pack. Crowdfunders say it nonetheless hasn’t materialized.


iBackPack

Builders of a high-tech backpack are below fireplace from the US Federal Commerce Fee for what the company says have been misleading crowdfunding practices.

The FTC stated in a launch Monday that Douglas Monahan’s firm, iBackPack of Texas, LLC, raised $800,000 from customers over 4 fundraisers. The company filed a criticism Monday within the Southern District Courtroom of Florida, alleging that iBackPack and Monahan used “a big share of the funds on numerous private bills.” The cash was meant for growth, manufacturing and supply of merchandise, however the FTC stated that thus far no backpacks have been delivered.

“Whereas tons of of customers have complained concerning the campaigns, defendants largely have ignored refund requests after which shut down the corporate, have transferred the remaining cash to unrelated corporations run by defendant Monahan, and have ceased communications with customers,” the criticism stated.

Andrew Smith, Director of the FTC’s Bureau of Client Safety, stated those that elevate cash by way of crowdfunding haven’t got to ensure their thought will work, however the funds need to be devoted to work on the concept.

Monahan first sought funding for iBackPack in 2015. By November 2017, the crowdfunding marketing campaign had raised $720,000, in line with the FTC. The backpack had a distribution date of March 2016, which was missed, and Monahan started one other fundraiser on Kickstarter. The second fundraiser resulted in April 2016, garnering a further $76,000. Across the identical time, Monahan began two extra campaigns on Indiegogo and raised $11,000, in line with the FTC.

Monahan’s web site and the campaigns are nonetheless on-line. Customers have voiced their displeasure within the feedback part demanding their a refund, citing Kickstarter’s phrases of use.

In accordance with the Indiegogo marketing campaign, the iBackPack would be capable of maintain “all of your electronics” and would include an non-obligatory built-in Wi-Fi connection and batteries “galore.” The TSA-friendly pack, with a built-in rain hood and 30 compartments, would be certain that all of your electronics are charged.

iBackPack and Monahan could not instantly be reached for remark.


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