Pledge a huge amount of money. Secure the promise of an awesome reward. Wait for the rewards to ship. File a dispute with Amazon Payments. Get your money back.
It is a simple scam, and it may have worked for one “Encik Farhan” to the tune of over 100 campaigns. A project creator named Alex Heberling led the charge of publicizing the scam after her campaign fell victim to Farhan. She received $1000 from Farhan, representing a significant portion of her $4,300 raise. Her goal was $3,000. Heberling is the comic book creator behind The Hues, the third chapter of which she funded on Kickstarter.
She took to Twitter on November 7th to share the revelation, and it promptly took off from there…
I feel like it’s safe to discuss this publicly now.
— Alex Heberling (@alexheberling) November 7, 2013
This guy: http://t.co/qOoxWWYKZT is a @Kickstarter scammer.
— Alex Heberling (@alexheberling) November 7, 2013
Encik Farhan pledged $1000 to my campaign and filed a chargeback a few weeks ago, after I said I’d started shipping rewards.
— Alex Heberling (@alexheberling) November 7, 2013
He has done this to DOZENS of creators, I wouldn’t doubt that a majority of the projects he backed, he has filed chargebacks 2 months later.
— Alex Heberling (@alexheberling) November 7, 2013
I was contacted by one of the other creators he backed, who collected responses from dozens of other creators confirming he is a scammer.
— Alex Heberling (@alexheberling) November 7, 2013
There are lots of Google results for “Kickstarter campaign scam,” but it’s almost impossible to search for what if a BACKER is a scammer.
— Alex Heberling (@alexheberling) November 7, 2013
There is no built in way to report an individual profile on @Kickstarter.
— Alex Heberling (@alexheberling) November 7, 2013
I am still waiting for the results of my appeal. Losing $1000 will ruin me if the credit card company sides with Encik Farhan.
— Alex Heberling (@alexheberling) November 7, 2013
But he is doing this to dozens of project creators and I’m all for a good public shaming.
— Alex Heberling (@alexheberling) November 7, 2013
.@kickstarter has let me know they have passed this issue along to their Trust and Safety team for further investigation.
— Alex Heberling (@alexheberling) November 7, 2013
Thank you all for the kind words and support. It really means a lot! It’s been a long few weeks dealing with this situation and worrying.
— Alex Heberling (@alexheberling) November 7, 2013
When I woke up this morning, I did not know I would be raising hell. But when I saw all those other creators talking about what happened…
— Alex Heberling (@alexheberling) November 8, 2013
I spent the last few weeks worrying and sobbing, thinking I’d done something wrong, wondering how I was going to get thru the next 2 months.
— Alex Heberling (@alexheberling) November 8, 2013
When I read everyone else’s accounts of this guy filing chargebacks, well… I got mad.
— Alex Heberling (@alexheberling) November 8, 2013
A summary on Tumblr describes the scam in more detail and reiterates the risk it posed to Heberling’s success.
Encik Farhan is a scammer. He backs projects, pledging hundreds or thousands of dollars at the highest tier, and then disputes the credit card charges 1-3 months later, often after his rewards have been shipped.
He pledged $1000 to my campaign, and a few days after I posted an update that backer rewards were being shipped, he filed a charge dispute with his credit card company. I’m still waiting for the outcome of my appeal, but if I lose $1000, it will ruin me.
Another project creator got in touch with me this week, asking about Encik Farhan, and dozens of creators have been affected by this asshole, but there is no built-in way to report individual backers or profiles on Kickstarter.
Kickstarter issued statements to various news outlets on the matter, including the following statement from ComicsBeat…
“Kickstarter and Amazon Payments, our US payments processor, were recently alerted to a series of malicious pledges by a single individual to more than 100 Kickstarter projects. Upon learning this information, we shut down this person’s account, canceled their live pledges, and permanently banned them from Kickstarter. Kickstarter and Amazon are working together to investigate this situation. We won’t let a single bad apple harm the integrity or goodwill of our incredible community.”
The account has since been banned from Kickstarter. Project creators affected by the alleged scam are waiting as Kickstarter works with Amazon Payments on a solution to the now-defunct funds.
The reality is that anyone can create a Kickstarter account and creating one with a fake name is relatively easy. The easy user on-boarding is one of the aspects of Kickstarter (and many other crowdfunding platforms) that aids in making these sites such robust funding ecosystems.
However, Kickstarter may now be forced to put in checks for backers similar to the checks they have for project creators. One suggestion from Heberling was a “report backer” button, which makes a lot of sense. (Although if I am Kickstarter I’m not excited about the overhead and resources necessary to perform due diligence on reports from that system.)
The situation also begs the question of whether the terms of Amazon Payments align well with crowdfunding as a means of raising capital.
I’ll also reiterate that all of these questions will eventually pique the interest of regulators. Enjoy the days of laissez-faire rewards-based crowdfunding, because they’re likely to end eventually barring one of these platforms adopting some revelatory self-policing structure that proliferates through the space. That would be tremendous, but I’m not holding my breath.
Other crowdfunding platforms should take notice. This possibility of fraud is not unique to Kickstarter by any means. A similar scam could take place on platforms using Paypal or other payment processors that allow chargebacks.
[h/t The Verge, ComicsBeat]