Crowdfunding small print binned as Retro Computers Ltd loses court refund action

A crowdfunding backer of Retro Computers Ltd has won his court claim for a refund against the Brit company for failing to deliver its promised product. The court, in south England, also ruled that Indiegogo’s terms and conditions were not relevant to the claim. At Luton County Court this morning District Judge Clarke ruled …

[msknight]

Honestly....

Having his cock chopped off? How much further down will they go?

Edit .... I mean, in people's estimation, not body parts.

[DNTP]

Re: Honestly....

To me it'd be a bit like losing a third leg, right? They're gonna have to call me "bipod" after that one.

[Anonymous Coward]

Re: Honestly....

> They're gonna have to call me "bipod" after that one.

At least it would stop me from tripping over it every time.

[Anonymous Coward]

I blame woodcocks for the trolling...

How many cocks would a woodcock chop,

If a woodcock could chop cocks?

[The Nazz]

Re: Honestly....

Such a shame that the Judgment couldn't include the following ...

That Dr Levy report to Luton General Hospital (outpatients dept lol) by 9.00am Friday xx February 2018 for the purpose of having his penis removed ( or in laymans terms having his cock chopped off).

The hospital shall further be entitled to make a charge of £999 towards the provision of anaesthetic.

Would do a lot to help further relationships, business, if it were so.

[Anonymous Coward]

Re: Honestly....

Obviously it wouldn't then stand up in Court.

[Anonymous South African Coward]

Sad that this should end like this.

Ruins everybody's day in the end.

[wolfetone]

Speak for yourself. I'm thoroughly enjoying this clown Levy being given enough rope to hang himself on.

[defiler]

Sad that this should end like this.

I'll take that as "sad that RCL should fuck things up so consistently and so completely" rather than "sad that somebody should take them to court over it".

I mean, by now they've screwed the pooch so comprehensively that they could write the definitive book on the subject...

[I ain't Spartacus]

It's an interesting judgement - though not binding on other courts. As I think some of these Kickstarter / Indigogo schemes look little better than scams. So it's nice to see that you can't promise to ship some vapourware real-soon-now^[TM], then run away giggling with the money - and fob everyone off with getting nothing as they were only backing your R&D project.

As I understand it videogames have recently bombed on Kickstarter, because so few ever got produced, after taking the money. Oddly the boardgame industry have become their biggest growth area, because a lot of the stuff is being produced by existing companies, who are simply using it as interest free credit.

[eldakka]

> As I understand it videogames have recently bombed on Kickstarter, because so few ever got produced, after taking the money. Oddly the boardgame industry have become their biggest growth area,

Board games tend to cost a lot less for RnD, artwork, and so on than a videogame.

Production cost might be more (mass producing the pieces, the board, etc) , but the time and cost to get to that point are typically considerably less. And you only enter that phase once you have a finished product.

For videogames it's the reverse, all the costs go into the RnD/programming, with production and distribution costs being trivial (because people can just download the finished game).

[Oh Homer]

"Remains trading"?

Trading what, hot air?

Personally I think any company that fails to deliver any goods whatsoever, after such a long delay and after taking advance payment for those goods, should be forcibly liquidated by the courts, and all remaining assets seized and used to compensate the creditors.

Is that unreasonable?

[Anonymous Coward]

Re: "Remains trading"?

If they're still trading then they have the opportunity to pay the amount of the judgement, and everyone's (sort of) happy. If they fail to pay then it's open to the plaintiff to apply for a winding-up order to liquidate their assets. In other words it does work much as you describe already, but with the proviso that they don't pay the amount awarded first.

[Stoneshop]

liquidate their asses

Oh, assets. Never mind.

[Steve the Cynic]

Re: "Remains trading"?

@Credas: The broad strokes of your post are correct, although you've missed some important details:

Between the original court order (i.e. the one that's just been made against RCL) and applying for a winding-up order, you have to give them a chance to pay, then you can make "stronger" attempts to collect(1) such as sending bailiffs(2), THEN you make what's called a "statutory demand", and if this isn't paid in three weeks, THEN AND ONLY THEN should you consider submitting a "Creditor's Petition" for, in the case of a limited company, "compulsory liquidation".

Second key point: the Creditor's Petition may be submitted by any of the creditors. It does not have to be agreed by *all* the creditors.

Third key point: the debt must exceed, the last time I looked, £750, regardless of the size of the company.(3)

Fourth key point: even if the defendant is an individual, preparing the Statutory Demand is best (by far) left to a solicitor. Do NOT attempt to prepare it yourself.

Fifth key point: the Statutory Demand must be served *in person*, although you can appoint a representative to do it if the defendant is far away from you. Private detective agencies do a roaring trade in this.(3)

Sixth, and probably the mostest keyest, point: It's *expensive* to do this.

(1) Against private individuals, the "collecting it" part is probably the hardest.

(2) If you've had to call in the bailiffs, the chances of them collecting anything useful from a private individual are basically zero. Against companies, however, they are quite effective. They have rights of entry to company premises that they don't have against individuals, and having bailiffs turn up and start removing the furniture will generally get a company to cooperate.

(3) In my case (I was the creditor), the defendant didn't want to be found, and I had the distinct impression that the situation had offended the detective's professional pride. He eventually sent a female operative who was successful in serving the papers. This was after a council representative had told me that although he wasn't allowed to tell me even just a plain "yes" or "no" answer to "is this person still at this address?", he was prepared to advise me to serve the papers at the address in question.

[Anonymous Coward]

On the other hand

It is entirely reasonable that some products may never make it past prototype stage. That is a reasonable outcome as long as the effort has been put in (i.e. not a fraud).

I don't see how any of these transactions can provide a guarantee of success or full refund - you are after all paying for product development and marketing. Not all products will scale to mass production as easily as you may think, and some may attract unanticipated side effects of copyright, patent or other IP challenges.

This is no longer like venture funding where there remains a possibility of failure, but turns the process into a shop where delivery is guaranteed. I must say - I am not sure the ruling is satisfactory IMHO.

I'm off to the betting shop to get my money back now :)

[Spartacus Mills]

Re: On the other hand

but....the thing is... RCL clearly stated in plain black and white on their Indiegogo campaign, that any backer who pays "£100 + Shipping" --- shipping, that's a pretty funny thing to be paying for if you're just randomly donating to an 'idea', eh? --- will "OWN a first production run Vega+".

the 2 key words there are "SHIPPING" and "OWN".

If they didn't mean it, then it's their fault for specifically saying it, in very unambiguous terms, from the outset.

[Absent]

Re: On the other hand

From the Vega+ page:

Current Status

The development of the Sinclair ZX Spectrum Vega+ is complete, and we have a fully working prototype waiting to go into production in the UK.

[Tigra 07]

Re: Absent

"Production and shipping of the first Vega+ games consoles are planned for late summer 2016"

The line after your quote Absent (for context).

[eldakka]

Re: Absent

> late summer 2016

So is that February 2016 or August 2016?

[Oh Homer]

Re: On the other hand

Well, despite my earlier outrage, I'm afraid I must agree, to an extent. Indiegogo has more in common with Ladbrokes than eBay. It's venture funding, not retail.

The problem is the crowdfunders' false expectations, compounded by unclear terms and legalese, and the typical crowdfunder's lack of experience with the process.

In all seriousness, I think crowdfunding sites ought to be presented and regulated more like gambling operations, and the fact that you are essentially placing a bet that may not pay off should be emblazoned in flashing neon lights across the front page. Once it's clear that the only legal obligation the jockey you're backing has is to attempt to win, without any actual guarantee that the horse will even cross the finish line, then cases like these would probably never even come to court in the first place.

However, in this case it seems the jockey never even mounted his horse, or even had a horse to begin with, he just took the money and ran, so I think it's only right that his backers should be refunded, as the race you were betting on never actually took place.

[Grease Monkey]

Re: On the other hand

"It's venture funding, not retail."

So why did they use the word "order" then. If it's venture funding then the word would be would be "investment". The word "order" does not merely imply this is retail, it states it as clearly is possible without using the word "retail" itself.

The reason Levy is terrified had nothing to do with his cock and everything to do with the fact that this sets a precedent for everybody who placed and order to sue. And of course this precedent having been set it will be so much easier for every subsequent action. They should subbing fly through the small claims court.

Expect the next story to be that the company has filed for voluntary liquidation. As such if you are one of the poor said who placed an order with these cowboys you'd better get your claim in quickly.

[John Brown (no body)]

Re: On the other hand

"The problem is the crowdfunders' false expectations, compounded by unclear terms and legalese, and the typical crowdfunder's lack of experience with the process."

As the judgement makes clear, the crowdfunders were made promises. There were no caveats.

Oh, and I think in light of the judgement, your last point ought to read "...the typical crowdfundees's lack of experience with the process.", ie it was up to RCL to make clear when forming the contract that there may be no product at the end of the process or that delays may be years in extent.

[Anonymous Coward]

Re: On the other hand

"I'm off to the betting shop to get my money back now :)"

If the bookies had said, if you give us £100, you will get the name of the winning horse, which then failed to even run, I think you would be ok to claim your money back.

[Anonymous Coward]

Re: On the other hand

You're missing the very CRUX of the judgement. It is NOT a gamble. Regardless of how a company plans to pay for production - crowdfunding included - if they don't deliver, you are protected under the consumer rights act. THAT is the decision that was clarified in this case.

You don't think the ruling is satisfactory, but it was made by a judge. What about your experience makes you think you know the law better than he/she does?

Crowdfunding is not - and SHOULD NOT be a risk, especially one that CLAIMED to be at such an advanced stage as this did. If the company hits their goal but fails to delivery on their promise, they shouldn't be (and with the ruling today are not) allowed to just say "sorry, tough luck".

[Colin Tree]

Re: On the other hand

No, I don't think that is what the judge said.

Morton was protected because " the campaign owners have to perform any promise to contributors. "

In this case " it says 'this order'. Not 'this pledge' but 'this order' has been successfully added to your campaign, said the judge "

I'm very dubious about crowd funding.

A developer should have a prototype product to show that they are fair dinkum. Fine tuning plastic mouldings, etc and doing a production run are worth funding and you might reasonably expect something back for your money. And it will help the fledgling company get up and running.

[Jon 37]

Re: On the other hand

Delivery still isn't guaranteed. But if they fail to ship, then consumers will get court orders against them, and if that happens enough then they'll go bankrupt. Then there is a chance that consumers might get a little bit of their money back, and the receivers will check the books and anyone is obviously committing fraud can theoretically be prosecuted. Exactly like any other purchase, just riskier.

What the court has done is said that the company can't just decide to keep the money and refuse to ship the products. It has to give ship, give refunds, or go bankrupt just like any other company.

[Tom 38]

Robert Zimmerman

Nothing was delivered, and I tell this truth to you - not out of spite or anger, but simply because it's true. Now, I hope you won't object to this, giving back all of what you owe. The fewer words you have to waste on this, the sooner you can go.

Nothing was delivered, but I can't say I sympathize with what your fate is going to be, yes, for telling all those lies. Now you must provide some answers for what you sold that's not been received and the sooner you come up with them the sooner you can leave.

Now you know nothing was delivered and it's up to you to say just what you had in mind, when you made everybody pay. No, nothing was delivered and someone must explain that - as long as it takes to do this, then that's how long that you'll remain.

[Lee D]

Well, if those statements to the court from the company prove anything, it's that c**ks are involved and to steer well clear of any company that does business like that or answers the court like that. They couldn't even be bothered to turn up, which is probably most of the reason the guy won.

Hopefully, this tanks the company good and proper as everyone else follows suit.

Saw it coming from miles off, by the way. Mad Speccy fan (I owe three real ones, one with modified UHF modulator to output over composite cable, etc.). Mad crowdsourcing fan (also steered clear of the OpenPandora for similar reasons - but had several GP2X I used to program for - and have backed all kinds of other crowd-sourced stuff). Took one look at this and said "Nah".

My next prediction - that Psion-revamp thing will similarly tank.

[Anonymous Coward]

Re: prediction

Considering the same people are behind it - I would't be surprised

[JamieXCalhoon]

According to someone who was there in court, the judge actually made it clear that it was NOT a summary judgement, and treated the case *exactly as he would have done had RCL turned up*. If you read & understand the judgement, the backer won because he proved that despite RCL and Indiegogo's claims, HE HAD a LEGALLY BINDING CONTRACT OF SALE with the company, and therefore they HAD to either deliver or refund. This is a FAR more important point that just for this backer's case, as the backer's argument can now potentially be used for ANY crowdfunder who doesn't delivery on their promises.

That's a BIG, IMPORTANT judgement.

[John Brown (no body)]

"That's a BIG, IMPORTANT judgement."

Absolutely correct. It sends out a huge warning to future crowdfunders to make sure they include all the relevant caveats that you are making a donation and *may* get a reward if the product makes it market. Of course, this will make it harder for crowdfunders to raise the capital if the donaters don't get any sort of guarantee but should cut down on some of the more esoteric and wacky ones that anyone with a bit of common sense would realise is a pile of monkey cack. If the risk to the donator is higher, they are less likely to donate.

[katrinab]

But then you have to comply with the rules on soliciting investments from the public - prepare a prospectus, get it signed off by an auditor and so on.

[chas49]

It's an interesting judgment, but it doesn't set a precedent. No other court is bound to follow this decision until or unless it's upheld by a higher court (if there was an appeal).

[John Brown (no body)]

"It's an interesting judgment, but it doesn't set a precedent. No other court is bound to follow this decision until or unless it's upheld by a higher court (if there was an appeal)."

But it's still now in the record. It can and will be used in support of similar claims to add weight.

[ThomH]

As well as a Series 3a in a drawer somewhere, I've got a Spectrum Next coming, because I'll really, really, I absolutely promise myself, use it as a practical FPGA board in order to learn an extra skill. Honest. It's not just for games.

[Dan 55]

I'll really, really, I absolutely promise myself, use it as a practical FPGA board in order to learn an extra skill. Honest. It's not just for games.

I think I said something similar to my parents when I was about 10.

[Anonymous Coward]

@Lee D; "it's that c**ks are involved"

Especially when people are making threats to cut them off!

Supposedly.

[6491wm]

Re: My next prediction - that Psion-revamp thing will similarly tank.

Nah it seems in a much healthier position. Unless they realy are going all out to defraud people then based on their latest updates the first production units are currently being assembled and should be rolling out shortly

https://www.indiegogo.com/projects/gemini-pda-android-linux-keyboard-mobile-device-phone#/updates/all

[bobmajors]

Re: My next prediction - that Psion-revamp thing will similarly tank.

Don't forget, RCL also put out photos of Vega+'s being assembled.

They turned out to be a batch of prototypes which didn't work particularly well, but were paraded around for a year by people like World of Spectrum "owner" Lee Fogarty and self-proclaimed "most prolific ZX Spectrum developer" Jonathan Cauldwell as "proof" this wasn't a scam.

[RyokuMas]

"outside the court in Luton tomorrow"

There's far worse than trolls in Luton...

[Brewster's Angle Grinder]

Yeah, there's also ogres.

[defiler]

I once saw Phil Mitchell from Eastenders in Luton Airport. The horrors never end!

[Anonymous Coward]

I think people are missing the point here....

Hi,

The big point from all of this is the fact the judge has said that some of the Indiegogo T&C's are not valid due to the actions and communications of RCL. Without looking at the small print (and to be honest I can't be arsed), this judgement manes that companies might not be able to shelter behind the Indiegogo front and that they will have to be a lot more careful about how they write their unicorn offerings.

I expect to see more companies being clearer that you are not buying a product but perhaps making a risky investment in a product that might or might not appear. Whether this is a good thing or a bad thing is unclear to me, but I expect a lot of UK companies to reconsider their offering now.

[Lotaresco]

As it should be

A product with a Sinclair name attached to it being delayed for years because the company is up to some messy financial shenanigans? These guys really are dedicated to reproducing the full Sinclair experience aren't they?

[Korev]

Re: As it should be

I C5 what you're saying

[I ain't Spartacus]

Re: As it should be

Wasn't the C5 the one product he was able to make enough of - and that wasn't delayed. Admittedly that was because nobody wanted them...

I drove one a few years ago, and it was amazing how unstable they felt, for something so low to the ground. The thought of taking one on actual roads is terrifying.

[Anonymous C0ward]

Re: As it should be

You might say, it's a Quantum Leap in the retrocomputing market

[anonymous boring coward]

Re: As it should be

In fairness to Sinclai, Amstrad, etc, at least they tried making products for end users.

Don't see much of that nowadays in this country.

[Anonymous Coward]

One down, hopefully many to go!

Seriously, if you look around IndieGoGo then something immediately catches my eye: the comment section. So many comment sections in which you can read complaints and concerns about delivery. Even up to the point where alarmbells should be going off before considering to fund something.

I recall this project about "revolutionary" phone cases, people could support the project and you get one for your phone. It was (obviously) an "amazing" product because of dozens of features. The only caveat which soon got noticed by plenty of backers: during the order / support process people couldn't share what kind of phone they were using. Seems like a rather important detail to me, but I guess the product is so revolutionary that one size fits all.

I sometimes seriously wonder if there actually has been one IndieGoGo project which actually worked and fulfilled its promises.

[Absent]

Re: One down, hopefully many to go!

I had a successful one, got a piece of coal in a box for contributing towards the costs of an art exhibition.

[Anonymous Custard]

Re: One down, hopefully many to go!

I sometimes seriously wonder if there actually has been one IndieGoGo project which actually worked and fulfilled its promises.

The PiTop Ceed and the Fing Fingbox both spring to mind as ones I've backed and been very pleased with. But I also admit that probably says more about the quality of the companies themselves rather than anything to do with IndieGoGo.

[Jedit]

"rather than anything to do with IndieGoGo"

Indiegogo is where you go if you can't meet the standard required by Kickstarter. They are notorious for providing a "flexible funding" method, where the project runner gets paid even if the goal isn't met - and thus they are by their own admission incapable of fulfilling their promises. Basically, you should assume that any IGG project with flexible funding is a scam.

[David Tallboys]

Venture Capital is risky, crowdfunding more so.

It takes about ten times as much money to go from working prototype to consumer product.

Beware next time you back a start up.

I've run a venture capital fund - I'm so pleased crowd funding came into being. We once got a handwritten business plan for a spaceship. Now the crowd funders get them.

[Anonymous Coward]

The picture illustrating the story...

A nice touch that a story about Retro Computers Ltd is illustrated with the retro pound coin.

[Anonymous Coward]

I still live in hope...

...of getting mine. And the Vega+ too.

[Anonymous C0ward]

So how do the rest of us get our money back? Drown them in over 9000 individual court cases?

[Richard 12]

Yes

You'll get summary judgements now that the test case has gone through.

Small Claims can be done online, just reference this case.

[John Smith 19]

IIRC Sinclair "pre sold" hardware then used the money to get the mfg running.

However IIRC he had the prototype sorted before the ads started appearing.

So he had a design to with a parts list, board layouts etc, ready to go.

Not 2 years from estimated delivery date.

These guys just sound like scam merchants. *

*But of course they might deliver something in the end.

[Lotaresco]

Re: IIRC Sinclair "pre sold" hardware then used the money to get the mfg running.

"However IIRC he had the prototype sorted before the ads started appearing."

That may have been true for some of his products but certainly wasn't so for all of them. I recall seeing the adverts in Wireless World for various Sinclair Radionics products. I paid for several of these only to have them either delivered a year late and bearing little resemblance to the advertised product or in a couple of cases never delivered. Getting a refund out of Sinclair was impossible and consumer trading laws were weaker then so he got away with it. His matchbox radio seemed to be a figment of his imagination for the first year of sales. When it was delivered it was not much like the advertised product.

Alan Sugar used much the same trading model and, I suspect, had a relationship with journalists that resulted in good reviews for products that weren't worth the purchase price. I have particularly bad memories of an Amstrad amplifier that got rave reviews in a HiFi magazine. They didn't mention that the switch on thump could blow the speaker cones across the room. I had to add my own 555 and relay circuit to switch the speaker outputs to a dump resistor during switch on wait until the amplifier settled down for a few seconds then switch in the speakers.

I suppose it's good thing we got some innovative tech in the 1970s/80s and bad thing it's not a sustainable way to run a business.

[jeffdyer]

Re: IIRC Sinclair "pre sold" hardware then used the money to get the mfg running.

"I have particularly bad memories of an Amstrad amplifier that got rave reviews in a HiFi magazine."

It wasn't really a HiFi magazine then.

[Peter Gathercole]

Re: IIRC Sinclair "pre sold" hardware then used the money to get the mfg running.

Amstrad did have several lines that qualified as Hi-Fi.

I had an IC2000 20W RMS per channel amp and an IC3000 tuner, and they definitely met the Hi-Fi criteria of power, distortion etc, although they were paper covered chipboard and plastic. The design of the electronics weren't too bad, however.

You would not class them as anything other than budget kit, but they were definitely better than the majority of music centers that were available at the same budget.

The problem is that Hi-Fi has become elitist in the past few years, probably because there is no real market for low-to-mid range separates. I picked up a What Hi-Fi recently to look at a 'budget' turntable review, and was shocked to discover that the cheapest turntable they had in this 'budget' review cost something like £350, and it also included 'tables costing in excess of £700. The only way this is budget is if you regard transcription turntables as the norm.

[Horaced]

Choppy Trade

I had no idea that the company I paid for the contractual supply of a vega+ unit was presided over by a man with a morbid fear of cock-chopping trolls. And that such a man would later go on to use this as a credible defense for not showing up to a court hearing.

Well, if I'd known, I would have bought three!

[Alpy]

Always Indiegogo!

Why does it always seem to be Indiegogo that attracts the scammers? I got scammed last year via them on a product that never arrived and the company disappeared into the ether. When I complained the response was 'talk to the company not us'! When I went to my credit card provider to report the scam they chased Indiegogo for the evidence and they gave my bank the same message, bugger off and don't bother us, thus no refund to my credit card, helpful. They just don't care or have any vetting process in place. Scammers central.

My advice would be avoid Indiegogo to avoid said scamming disappointment.

[phuzz]

Re: Always Indiegogo!

IIRC Indiegogo have less stringent requirements than Kickstarter (eg, you actually have to have a working prototype on Kickstarter), hence why more Indiegogo campaigns turn out like this one.

[I ain't Spartacus]

Re: Always Indiegogo!

Alpy,

If the product was more than £100 - your credit card company are jointly liable with the now bust company that didn't ship your goods. So they aren't legally allowed to just say, we couldn't get your money back sorry - they have to pay you and eat the losses. It's called your Section 75 rights.

However, that might not be the case with an Inidgogo campaign. This judgement suggests that if they've got the wording wrong, then you're entering a sales agreement. But if the wording is right, then it probably is a speculative investment, where the actual goods are counted as a reward (or some other such weasel terminology) rather than a product. In which case you're probably out of luck.

[andy gibson]

New investment opportunity for people with refunded cash

Send your £105 refund to me and I'll:

Buy a PSP on Ebay for about £20

Softmod and Install a Spectrum emulator on it

Ship it to you first class.

£££££££££££ :-)

[Jake Maverick]

Even when you win you still don't win as the costs ALWAYS massively outweigh whatever you get back :-( Same thing happened to me when I had to sue Escom back in the mid 90s....came very close to having to drop out of uni because of it....

[defiler]

Escom? Escom... Now that's a name I've not heard in a long time.

Didn't they own the rights to Amiga at one point? Or at least believe they did?

[Andre 3]

Would the same have happened to a UK based backer, funding a US based "project"? I wonder if I could force a bunch of the unicorn projects to give a refund through this judgement.