IndieGogo’s Fraud Problems Are a Good Reason to Avoid the Site

With lower artem-shipitsyn-gobe-indiegogo-healbe[1]standards than Kickstarter, Indiegogo has always been (in my mind) an iffy site where I couldn't really be sure that crowdfunding campaigns supported a real device or simply a fake mockup.I've been concerned about Indiegogo ever since I noticed that the PopSlate iPhone case launched in November 2012 but still hasn't shipped, but now that I see they have actual fraud going I will be avoiding the site completely.

PandoDaily has been following the tale of a wearable called the Healbe Gobe that can supposedly measure your glucose with a skin sensor and deduce your caloric intake. Unfortunately, this miracle device is probably bogus:

Since last writing about the GoBe, Pando’s investigation has focused on the medical claims behind the device. Ten days ago, when we spoke via Skype, Shipitsyn explained the device’s science to me as follows: when you eat sugar, the insulin causes your cells to open up and release water, which Healbe measures through the GoBe’s impedance monitor – a device that can track fluid levels – and allows Healbe to calculate your glucose level.

“That’s some straight Ghostbusters, Peter Venkman bullshit,” says Zubin Damania, a Stanford-educated, Las Vegas-based doctor.

In fact, all of the experts we spoke to agreed that an impedance monitor has no way of making any meaningful correlation between the level of fluid in our body and glucose levels. There also appears to be no medical literature showing anybody having tried to make Healbe’s link between fluid in our cells and glucose.

Even if true, the technological breakthroughs claimed by Healbe couldn’t “just magically come up out of thin air,” says Ries Robinson, the CEO of Medici Technologies, who has a Masters in mechanical engineering from Stanford and a degree in medicine from the University of New Mexico.

In spite of the complete lack of medical credentials, work history, scientific research, or any other background details which would back up or verify the claims made by the device's maker, Indiegogo has yet to pull the campaign. They haven't even suspended it or added a warning message.

This campaign is about to reach the million dollar mark and Indiegogo's only response was to change their FAQ:

What’s the right thing to do if your crowdfunding platform guarantees to detect “any and all” cases of fraud, but then is shown clear evidence by Pando of a near-$1m fraudulent campaign happening right now?

If you answered “suspend the fraudulent campaign,” you’re right.

If you answered “quietly delete the no fraud guarantee from our website,” you’re Indiegogo.

I’m not joking. Following a week of reporting by PandoDaily in which we exposed the junk science, corporate smoke and mirrors and flat lies behind Moscow-based Healbe’s Indiegogo campaign, Indiegogo finally took action yesterday. Not by suspending the campaign to protect its users, not by doing anything at all to ensure that thousands of people aren’t about to be swindled out of close to a million dollars… but by deleting the reference to their foolproof fraud detection from their support pages.

While I don't expect Indiegogo to be infallible, I do expect them to correct their mistakes and not simply cover their own ass by changing the rules. This is a tacit admission that they know the claims made about the Healbe Gobe are questionable at best, and rather than pull the campaign they're going to pretend there is no issue.

I plan to avoid Indiegogo in the future, and I think it would be a good idea or everyone to avoid the site.

One of the cornerstones of crowdfunding is trust. Indiegogo has shown that we cannot trust them to protect backers against unscrupulous campaigners, and that's why I trust this site about as much as I would trust a used car salesperson.

About Nate Hoffelder (10619 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

16 Comments on IndieGogo’s Fraud Problems Are a Good Reason to Avoid the Site

  1. I think it is too much to put them “in the same category as phishing emails from Nigerian princes”. All we know now is that they don’t want to judge the quality of the projects on their platform. If backers are fine with making their own judgements, that seems to be OK. Whether the platform fee for that kind of “service” is reasonable is a different question. At least, Indiegogo has had some publicity and thus might get some attention from potential project backers. Kickstarter’s even higher profile still doesn’t heal its deficit of only being available to creators in the US, UK, Canada, Australia, and New Zealand.

  2. We’ve gone from shiesters selling phony medical devices to shiesters selling phony medical devices that will never exist. Are we much worse off?

    • It’s “shyster,” not “shiester,” and you’re applying the wrong epithet. A shyster is an unethical or unscrupulous attorney. The right description in this case is “quack.”

      • Nonsense. A shyster is any fraud. Just because Mr. Shyster was an attorney in a Marx brothers radio show, that doesn’t mean the word has no wider use.

  3. I’ve funded four kickstarters, three delivered the goods, the last one the guy appeared to cut and run. It is very disappointing, but I understand the risks of the premise. I’ve sworn off funding any more KS or other crowd-sourcing ventures going forward – they do not have hard, enforceable contracts, and if they did, hobbyists wouldn’t risk using the site anyway. Too bad, it’s a neat idea.

  4. BTW, popSLATE just posted an update:

    They are moving forward to manufacturing and now show off the components prepared at their warehouse. They’ll use Plastic Logic screens.

  5. I don’t think Indiegogo should shoulder the responsibility for your due diligence. The second sentence of their ‘How to Evaluate a Campaign’ is “Like anyone contributing to an early-stage project, you accept the risk that the project might not come to fruition. We leave it up to you to make your own judgment about the merit of a campaign before making a contribution.”

  6. Everyone please be careful doing business with Indiegogo they have no consumer protection and very poor business practices. The California Attorney General Kamala Harris needs to investigate IndieGoGo ASAP. I have filed a Better Business complaint along with 109 others.

  7. Another problem:
    I am here…

    Someone have conctacts for lawyers to put on court Indiegogo?
    Because I setn money to Indiegogo, not for compaign.

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