Plastc Swiped $9 Million From Backers, Now It Plans To File For Bankruptcy and Shut Down (theverge.com)

Plastc announced today that it is planning to file for bankruptcy and will shut down on April 20, 2017, after raising more than $9 million through preorders and shipping to no backers. "Plastc launched in 2014 with the promise of shipping a single card that could digitally hold 20 credit or debit cards that a user could switch between," reports The Verge. From the report: With that, all backers' money is lost, and no Plastc cards will ship. Plastc announced the news on its website today along with the fact that all its employees have been laid off. Its customer care and social media channels have also been shut down. The company explains that it thought it would close $3.5 million in funding in February this year, but that fell through. Another possible investment deal of $6.75 million fell through, too. What's not clear is how more than $9 million wasn't sufficient to get backers their orders. Backers will likely have questions and want their money back, but with no one to turn to from Plastc, they'll likely be out the cash.

Comments

Annoying for small projects

[spiritplumber]

Kickstarter and Indiegogo exist for funding, well, indie efforts or attempts to start a business. These high-profile failures (these guys, Fontus, Juicero) make it hard for those who play by the rules to do well.

Three years ago I did a small crowdfund for a solid state laser cutter; we got 300% funded, delivered our backers' orders in 120 days, and everyone was happy. Small problem: I tell people this now, and nobody takes me seriously because "oh, crowdfunding? must have been a scam of some kind".

I'm ready to go with my next product and since my last one was "too small scale" investors won't talk to me.

As usual, a cool new ecosystem was ruined by parasitoids and saprophytes.

Re:Annoying for small projects

[GeekWithAKnife]

I think you got one thing wrong. The "cool new ecosystem" was not ruined by 'parasitoids' it was ruined by a lack of accountability.

Look at the Skully-AR1 funding on Kickstarter. This was a product with genuine potential, had working prototypes etc.

It's not that the founders were running out of ideas or their project was jeoperdised by scope creep or the like. They were blatantly using the money they got from backer for buying cars, last minute flight tickets to vegas, hotels, strip clubs and when the product did not arrive and there were delays they eventually filed for bankruptcy and made excuses.

Look at the shit they bought on campaign backers' money:

Rent for the brothers' personal apartments in the Marina
Security deposits for an apartment in Dogpatch used by the Wellers
Weekly apartment cleanings
Personal grocery bills for the Wellers
All restaurant meals for the brothers
Mitchell Weller's Dodge Viper, which was claimed for insurance following an accident, as well as the new Viper purchased by the company to replace it

Check here -> https://www.buzzfeed.com/nitas...

On the back of that, at the time, I pulled out of a major indiegogo funding campaign because I no longer had faith in the model. When I signed up to to it it had a large "back out at any time" message on the page. After considering the matter of Skully I decided to back out and was confused as to how this is done from my backers page. I read the FAQ and it simply said that I go to my backers page and hit the "Refund order" button. So simple except THERE WAS NO REFUND button.

I asked and I was told that SOMETIMES there is no refund button and that funds have gone to the campaign owner. So I cannot get a refund from Indieggo because they do not have the money. I emailed the campaign owner and got no response for two months. As I had no other information to go on I researched the campaign, backer and related company and sent them letters threatening to sue as they are subject to EU law (Luckily because US law is really shit on these sort of things). After some haggling I got my funds -12% for various fees, 2% were to Indiegogo...and you know what I was lucky to get anything at all.

They have since clarified their refund policy further -> https://support.indiegogo.com/...

Simply do not believe ANYTHING a campaign page says. It might very well say "hassle free refund." but really should say "limited refund options occassionally available, terms and conditions apply. If you believed this was honest and bought based on that assumption you're a sucker hahahaha"

Now ask Skully-AR1 backers if they got anything yet? Helemt? Refund? An apology? - There is ZERO accountability.

We MUST convince Indiegogo and Kickstarter - basically crowd funding in general to do more.

Firstly I would like FULL DISCLOSURE expense reports of backers money. There is NO excuse not to let backers of your porject know how you spent their money.
Secondly I want the crowd funding site to review sufficiently large projects, say over $1 million with a third party registered accountant to check this is not all BS.

Lastly, for blatant misuse of funds amounting to fraud I would like for Kickstarter/Indiegogo to sue these people to the ends of the Earth on backers behalf. I will pay good money, more than my original investment to make sure fraudsters are dealt with as harshly as possible.

Without any safety checks and so on I tell you now I will never ever back any product that has not been released and review or a has a money back guarantee I can trust.

Re:Normal practice in Corporate America

[kubajz]

I am surprised you were seriously modded as "interesting", since I find a number of your claims dubious.

1. I am not sure about US banks, but in my country banks earn money by transforming the maturities and amounts of deposits and spreading around risks to give loans, as well as providing other services such as card payments. Competition forces them to work relatively efficiently.

2. In my country, people who do not display "due care" when acting as officers of a limited liability company can be sued.

3. I very much doubt that being publically dragged through the dirt for wasting $9m of customers' money will look good on their CVs, let alone help them get better jobs.

I do admit that sometimes scams and fraud happen but I do not share your conviction that the whole environment we live in is built on it alone.

Re: How to copy?

[jawtheshark]

From my understanding, in Europe, the chip and pin does make a connection. Terminals generally do have a connection. For a while a lot of them were GPRS or POTS, so you can guess how long this has been used. I remember a few restaurants that had horrible cell reception, and you were pretty much asked to come chip and pin at the counter where reception was acceptable.

I do think that below a certain threshold amount, making the connection isn't mandatory. That's usually when it goes quickly and it doesn't say "connecting". I've only seen it happen on small amounts. Do note, that this is what I conclude from the behaviour. It would be better if someone who actually knows how this works to chime in.

If anything, I do not think that it's the card that stores the transaction. It would not make any sense at all. Imagine I do a 1000€ purchase, and it would be store-on-card. At that point, I destroy the card or never use it again. My card never gets the chance to "synchronize" with anything. Now, perhaps I misunderstood what you meant with "the balance would be kept on the card", but it definitely doesn't involve storing anything on the card. It's the terminal that must store and forward the transaction. Granted, it doesn't change anything in your scenario, but given European chip 'n pin do connect, I doubt you attack would be feasible (ignoring the fact you need a 1000 unconnected terminals, which is doing to be very hard to find).