Crowdfunding is a pretty neat idea because from time to time, you will chance upon pretty interesting gadgets that may or may not have been passed over by your typical investor. This allows the public to vote with their money as to whether or not the project gets made. Sometimes we end up with some gems like the Pebble smartwatch.However there are also times when we end up with scams or projects that don’t deliver as promised. Back then PayPal used to offer customers Purchase Protection in which failed campaigns will see them get their money back, but unfortunately if you are an avid backer on crowdfunding projects, prepare to take a bigger risk in the future.
PayPal has recently confirmed that they will be ending Purchase Protection for crowdfunding. This will take effect on the 25th of June via a new user agreement. This means that if you backed a project via PayPal and it fails or if it ends up being a scam, PayPal will no longer guarantee you that you will get your money back.
According to PayPal’s statement, “This is consistent with the risks and uncertainties involved in contributing to crowdfunding campaigns, which do not guarantee a return for the investment made in these types of campaigns. We work with our crowdfunding platform partners to encourage fundraisers to communicate the risks involved in investing in their campaign to donors.”
Filed in . Read more about Crowdfunding, Indiegogo, Kickstarter and Paypal.