Paypal has announced that crowd funding ventures will no longer qualify for payment protection, meaning you’ll no longer have outside help if the wine condoms, cat panties, or that completely legitimate hardcore sandbox MMO run by an MMA manager whose love for video games trumps his complete lack of experience making them doesn’t end up producing a final product.

New terms of service on the Paypal website remove payment protection from activities that include an entry fee and a prize, payments to government services, and payments on crowdfunding platforms:

Payments on crowdfunding platforms

The new terms are due to the heavy risks and uncertainties of crowdfunding. Unlike a straight purchase, the user pays to fund a product that may or may not reach fruition. Presumably this change in policy comes following losses incurred by Paypal in reimbursing people who lost out due to unfulfilled crowd funding (and there are a lot).

Back in 2014, Gamerant.com reported that only 37% of video game Kickstarters have fully delivered. MMO Fallout itself has reported on numerous failed projects crowdfunded by thousands only to shut down due to a mixture of incompetence and suspicious behavior. Earlier this year, development on Ant Simulator shut down amidst allegations by an ex-developer that the money was blown on alcohol and strippers.

Users have until June 25th when the new terms go into effect to shut down their Paypal account if they do not wish to be included.

Check out MMO Fallout’s (somewhat) weekly column Crowdfunding Fraudsters, where we look at bad crowdfunding campaigns to avoid.

(Source: Paypal)