THOSE LOOKING TO fund a project on crowdfunding sites like IndieGoGo could be better off using PayPal to cover themselves in case something goes wrong.

The payments company quietly announced changes to its user agreement which says that its Purchase Protection plan won’t cover payments on crowdfunding platforms.

The idea behind it was if you funded a project and then it falls through, doesn’t arrive or is significantly different to how it was described, you could ask PayPal to get your funds back.

The changes only apply to certain countries like the US and Australia. A spokesperson for PayPal Ireland told TheJournal.ie the changes do not apply to Irish users.

The move is unsurprising considering the nature of crowdfunding. While some services like Kickstarter only transfer funds when a target is reached, others like IndieGoGo let the project organisers keep the funds regardless of whether it’s a success or not.

The protection is only applicable to those which allow PayPal as a way of funding projects like IndieGoGo, which let those behind the project keep the funds, regardless of whether it meets its target or not.

Kickstarter, one of the biggest crowdfunding platforms in the world, issued an independent study which found that 9% of projects on the site failed to deliver rewards.

So while you still need to exercise caution before you decide to fund a project, in certain cases you have some protection.

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