Paypal, stop the protection if the crowdfunding goes wrong

The idea behind crowdfunding is undoubtedly brilliant: an innovative project launched by a team without significant economic capacity may see the light thanks to the financial support of the potentially interested users. What happens, though, if something goes wrong and the idea behind the project does not go through? In theory the various services offer the possibility to return money to investors of the less fortunate projects, in practice we know that is not always that way.

PayPal provides coverage for clients that support projects in crowdfunding, the Purchase Protection. However, because of some changes in that "policies reflect the risks and uncertainties of the crowdfunding", the service coverage will be eliminated as of June 25, 2016. According to the new rules, "payments on crowdfunding" platforms will not be eligible for receive protection. An answer to what is happening more and more frequently on various platforms.

According to a recent study about 9% of the Kickstarter campaign has failed to deliver what has been agreed with users. Unfortunately also increases the risk of hitting ad-hoc campaigns carried out, true fraud and where their bankruptcy could be guessed from the beginning and everything had already been arranged in advance. With the new policy, then, those who use PayPal to support a project in crowdfunding will not recover their money by contesting the charge on the payment service.

This is true both in the case of bankruptcy or product inconsistent with the promises of the design team, both in case it is an organized fraud real. The change in policy, which applies to Australia, Brazil, Canada, Japan and the US (and other regions), has a major impact primarily on Indiegogo and similar services, since PayPal did not offer her protection on Kickstarter, which in once it assumes no responsibility for the fulfillment (or not) of the prizes.

Here's the official PayPal comments released by the famous website Engadget: "In Australia, Brazil, Canada, Japan and the United States and some other countries we have excluded from our protection programs payments for in crowdfunding campaigns. This is consistent with the risks and uncertainties related to the involvement in this type of campaigns, which do not always guarantee a return on the investment made. We work with our partner platforms of the crowdfunding world so that those launching the projects communicate to donors the risks of investing in their campaigns. "