The FTC is investigating iBackPack, an $800,000 crowdfunding scam

Kickstarter and Indiegogo may have started with great intentions, but crowdfunding campaigns now seem at least as likely to fall short of their promises as to fully deliver on them. As The Verge reports today, the Federal Trade Commission (FTC) has taken a particular interest in the Los Angeles startup behind iBackPack, which raised nearly $800,000 across both crowdfunding platforms, then vanished without delivering on its promises.

Separate 2015 Indiegogo and 2016 Kickstarter campaigns depicted iBackPack as a black backpack filled with a Chinese factory’s worth of USB gadgets, effectively an all-in-one tool for computer-toting road warriors. Over 50 promised compartments — including “bullet proof” and “secret” pockets — would arrive preloaded with multiple battery packs, an internationally compatible cellular/Wi-Fi hot spot, a fan, a flashlight, tons of cords, a USB hub, and separate computer, wall, and car chargers. The “revolutionary new technology” would even come with “iOS/Android controller apps and much more.”

If walking around with a bulletproof backpack full of batteries and chargers wasn’t cool enough on its own, the startup even tried to leverage some sex appeal. “Share your wifi with the hottest looking girl in school,” a Kickstarter video proclaimed, “not just your friends.” Who wouldn’t be willing to shell out $249 (or more) for such a thing?

Hundreds of backers bought into the iBackPack pitch, but after getting funded on both platforms, the creators ultimately blamed an unlikely culprit — the dangers of lithium ion battery technology — for delaying the project. “It is critical for any products we release to be completely safe,” the startup said in its final, March 2017 update. “Our hope is that once we have visited plants in China, receive assurances [their] batteries are safe and have them go through extensive tests — we will be able to address the delivery of same.”

As millions of products contain lithium ion batteries, it’s perhaps no shock that backers weren’t convinced by that excuse. Some registered complaints on the crowdfunding sites, as well as with the FTC.

The FTC apparently began to reach out to backers this week to determine whether anyone actually received their iBackPacks. According to The Verge, multiple backers received a letter from the FTC’s Bureau of Consumer Protection, noting that:

Our office received numerous complaints from consumers that they never received the iBackpack they ordered. We reached out to the crowdfunding platforms that offered the product to get a list of backers and that is how I obtained your email address. I just wanted to see if you ever received the backpack? I would really appreciate it if you could let me know, as we would like to take steps from preventing further fraud in the crowdfunding platforms.

While Kickstarter confirmed that an FTC investigation has apparently been underway into iBackPack since 2017, Indiegogo — responsible for $720,910 of the $797,604 raised by the project — wouldn’t comment specifically on the startup. The FTC told one backer that while it always tries to recover consumers’ money when it files court cases, there might be no money left to recover if it was already spent.

If there was really only one person behind iBackPack, there might be a chance of finding some remaining cash from the nearly $800,000 haul, but the Kickstarter video claimed to have a team of over 20 people working on the project. That’s fairly ridiculous for a backpack filled with off-the-shelf components, but anything’s possible.

As The Verge notes, the FTC’s last known public pursuit of a wayward crowdfunder was in 2015, when a $122,000 board game campaign’s proceeds were instead spent on the creator’s rent and personal expenses. Despite a $112,000 FTC settlement, backers ultimately weren’t able to recover the already-used funds.

In iBackPack’s case, the project’s creator can’t be located, and the website and contact email no longer function. So it remains to be seen whether iBackPack’s backers will ever receive refunds, but at least the FTC is making an attempt to seek justice on behalf of consumers — and hopefully is serious about preventing further crowdfunding fraud, as well.