Says Company Lied To Consumers In Launch Video

The San Francisco District Attorney has filed a consumer protection lawsuit against the makers of the Lily Flying Camera, which announced last week it was folding, saying it lied to consumers in a video used to generate interest in the project and raise money.

The DA also slapped a temporary restraining order on the company to prevent it from continuing to do business, other than to offer refunds to customers.

The suit stems from a video that showed the aircraft being dropped into the water and then taking off to follow a kayaker and chasing a snowboarder down a mountain. It was viewed more than 5 million times in the first month it was online. The company received some $34 million in pre-orders for the aircraft.

But It was not to be, and the company said in an email last week that the project was suspended, and refunds could be claimed.

Forbes reports that many in the industry saw the deep discounts for pre-orders as a red flag that the company was unlikely to survive, and that it does not accurately reflect demand for a product at its full retail price.

The U.K. newspaper The Register reports that the complaint filed by the DA contains an email from Company co-founder Antoine Balaresque in which he asks the director of the video to not disclose the source of the footage that would be attributed to the Lily drone. He asked if a GoPro could be modified in post-production so that experts could not tell that it was shot be a GoPro.  "I don't know much about lenses but I think we should be extremely careful if we decide to lie publicly," the email reportedly says.

An excerpt from the complaint posted by sUAS news says: “In May 2015, Lily Robotics used a false and misleading promotional video for a camera drone to obtain over $34 million in “preorder” sales from customers all over the world.

"A “preorder” is when a customer pays a seller for a product with the understanding that the product is not yet available to be shipped but that it will be shipped by some stated future date.

"In addition, Lily Robotics did not refund those customers their money when it delayed for almost a year the shipping dates for its product, as the law required. Instead, it told its customers that the preorder money: “remain[ed] untouched,” was in “cold storage,” and was not being used “to run the company.” This, too, was false and misleading. According to a witness, Lily Robotics had actually used that preorder money as collateral to obtain a $4 million load so it could continue its operations.

"It is now January 2017. Lily Robotics still has not shipped a single product to any of its customers, and, according to a witness, it is running out of non-preorder money.

"To protect the misled customers’ funds and prevent Lily Robotics from further dissipating these ill-gotten gains, the People ask the Court to maintain the status quo by enjoining Lily Robotics from spending, using, or dissipating its customers’ preorder money except to provide refunds to preorder customers."

But sUAS news also reports that Lily used the pre-order funds to secure a bank loan, and refunds may have to wait until after that debt is retired … if any money is left over.

(Images from file)

FMI: http://sfdistrictattorney.org