Internet Crowdfunding Backfires On West Chester Apparel Company, Lawsuit Filed

A West Chester sports apparel company is under heat after failing to deliver clothing that was supposed to change color in response to body heat, according to the Pennsylvania Attorney General’s Office.

The Office of Attorney General’s Bureau of Consumer Protection is filing a lawsuit against Radiate Athletics, on charges that they were in violation of the business’ Internet crowdfunding financing agreement with financial backers.

The lawsuit alleged the defendants raised funds through an Internet crowdfunding campaign, a popular practice in which a particular product or venture is financed by monetary contributions from a large group of people, the Attorney General Said.

It is further alleged that the defendants created and managed a campaign on Kickstarter.com and ultimately induced more than 8,500 individuals to pay defendants in excess of $579,000. The company allegedly represented that it was in a position to offer bold-colored, machine-washable shirts that changed color if it met its initial funding goal.

According to the lawsuit, certain financial backers claimed they did not receive products promised by the defendants in their crowdfunding campaign and that others claimed they received incomplete orders. The company also is accused of failing to provide refunds to certain consumers.

These alleged actions are in violation of the Unfair Trade Practices and Consumer Protection Law.

The lawsuit follows numerous consumer complaints filed with the Bureau of Consumer Protection. The lawsuit seeks injunctive relief, restitution for consumers harmed by the defendants’ conduct and legal costs. It also seeks civil penalties of $1,000 for every violation of the Consumer Protection Law, and $3,000 for every violation involving a consumer 60 years old or older.

The lawsuit was filed in the Chester County Court of Common Pleas by the Attorney General’s Bureau of Consumer Protection, Philadelphia Regional Office.

Attorney General Kane offered the following tips to help Pennsylvania consumers avoid crowdfunding scams:

• Do not pledge to crowdfunding campaigns where the profile lacks details, a video, recent updates, or links to another website, as these may be scams. The more information that a campaign page contains the better.
• Read the fine print. If there are any holes in the terms and conditions, or if it is just confusing, don’t donate or pledge.
• Do not pledge money to a crowdfunding campaign in which the reward levels are overly complex. If the vendor requires separate communications from you to detail what rewards you intend to receive, then your order is more likely to get lost in the shuffle.
• Search for fundraisers on Facebook and other social media sites. Look to see whether the page has friends, or if people leave comments. Run a Google search on the fundraiser to see if the fundraisers have done projects like this in the past.

Consumers with questions on the lawsuit, or who would like to file a complaint, may do so online atwww.attorneygeneral.gov , by phone at 1-800-441-2555 or by email atconsumers@attorneygeneral.gov .