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Why was a scam company able to raise $76 Million Series B?

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Re: Why was a scam company able to raise $76 Million Series B?

#111

Post by nikcub »

chinmoy wrote: post #109
kevinalexbrown wrote: post #108

To answer the question at hand: "Why was [this] company able to raise $76 Million Series B?" They make money. What's more concerning to me is that the coverage in TechCrunch[0] and Business Insider wasn't able to raise a modicum of doubt. If googling "JustFab" returns "Class Action Lawsuit" in the first 5 results, it would seem that the reporters either didn't do the absolute minimum required for effective journalism…

Then again since when TechCrunch really practiced journalism?

https://www.google.com/search?q=scamville

led to an entire industry being changed

Re: Why was a scam company able to raise $76 Million Series B?

#112

Post by flexxaeon »

Normally you only see these types of action pages on adult sites (and Zynga games).

All the important info is far away from the button as possible.

Page is 'technically' letting you know that you're signing up for a subscription, yet the button only says "Complete Checkout"...nothing about 'Signing Up'.

They went through some verbal hoops to not use terms like 'subscription', '$39.95 a month' and to keep the '$39.95' away from the word 'month'.

Re: Why was a scam company able to raise $76 Million Series B?

#113

Post by mseebach »

tisme wrote: post #95
mseebach wrote: post #88

Earlier quoted context omitted.

Don't forget that doing a chargeback doesn't absolve you from having to pay for services you've legitimately signed up for, it just denies the parties the convenience of settling through the credit card companies. They can take you to court for breach of contract, and if (IANAL) the subscription contract is found to be legit, you have to pay + fees.

That is true in theory, but in practice, especially in situations like this that does not happen. For that there would have to be a much more transparent sign up process and actual delivery. Non-performance is not a good basis to start a law suit, especially if you're on the non-performing side.

I agree, but the GP made it sound like a get-out-of-jail-free card.

Re: Why was a scam company able to raise $76 Million Series B?

#114

Post by alanh »

nikcub wrote: post #111
chinmoy wrote: post #109

Earlier quoted context omitted.

Then again since when TechCrunch really practiced journalism?

https://www.google.com/search?q=scamville led to an entire industry being changed

Nik, your articles would seem to be of a much higher standard (and, accordingly, posted with greater infrequency) than most others on TC.

Plain and simple, it seems that most of the time, most of TC’s homepage is not investigative, but sensationalized triviality.

Thanks for being a part of the exception.

Re: Why was a scam company able to raise $76 Million Series B?

#115

Post by tisme »

mseebach wrote: post #113
tisme wrote: post #95

Earlier quoted context omitted.

That is true in theory, but in practice, especially in situations like this that does not happen. For that there would have to be a much more transparent sign up process and actual delivery. Non-performance is not a good basis to start a law suit, especially if you're on the non-performing side.

I agree, but the GP made it sound like a get-out-of-jail-free card.

Well, it's sad in a way but there are consumers that use it exactly like that. They order stuff and then charge back the money in the hope that the merchant won't care enough to fight the chargeback, which can cost a multiple of the original transaction.

Most large merchants have risk mitigation strategies that attempt to detect this before a charge gets processed and goods are shipped but that's a less-than-perfect mechanism.

Re: Why was a scam company able to raise $76 Million Series B?

#117

Post by kylebrown »

tisme wrote: post #9

Don't ask for a refund, go to your bank or CC company and charge back the 6 months. That'll hit them where it hurts. Little known fact about chargebacks: the merchant pays an administration fee, typically $20 to $50. Per charge! That is why the smarter scammers refund to everybody who complains, not refunding is plain dumb. This scam has been around for a long time, usually it's adult companies that sell you a 'free'…

Banks and, at least VISA, are not as quick to do chargebacks they used to be. Now, they'll only do them if the customer says their card was stolen. Found this out when my mother was scammed by a moving company for the 50% deposit (company never showed). She called the number on the back of the card to dispute the charges (I believe its the bank's customer service number, not VISA's). But the bank told her they couldn't reverse the charges since she was the one who authorized them. To get her money back, she'll have to take the moving company to small claims court.

Re: Why was a scam company able to raise $76 Million Series B?

#118

Post by d2ncal »

kylebrown wrote: post #117
tisme wrote: post #9

Don't ask for a refund, go to your bank or CC company and charge back the 6 months. That'll hit them where it hurts. Little known fact about chargebacks: the merchant pays an administration fee, typically $20 to $50. Per charge! That is why the smarter scammers refund to everybody who complains, not refunding is plain dumb. This scam has been around for a long time, usually it's adult companies that sell you a 'free'…

Banks and, at least VISA, are not as quick to do chargebacks they used to be. Now, they'll only do them if the customer says their card was stolen. Found this out when my mother was scammed by a moving company for the 50% deposit (company never showed). She called the number on the back of the card to dispute the charges (I believe its the bank's customer service number, not VISA's). But the bank told her they couldn…

I have used AMEX since the last 9 years, precisely for things like these. They are REALLY good at processing disputes and chargebacks, and in the last 9 years, there has never been a time when I 'lost' a claim against such fraudulent charges (I've had around 5 such claims).

On the other hand, both Visa and Mastercard are pretty much useless to 'protect' you against charges like these.

Re: Why was a scam company able to raise $76 Million Series B?

#119

Post by chinmoy »

nikcub wrote: post #111
chinmoy wrote: post #109

Earlier quoted context omitted.

Then again since when TechCrunch really practiced journalism?

https://www.google.com/search?q=scamville led to an entire industry being changed

I respect you man. Not gonna argue with you. Just before the re-branding of Hotmail to Outlook, there was an article on TC, claiming it takes '14 seconds' for Gmail to load. And posts like that one are not rare on TC.

Re: Why was a scam company able to raise $76 Million Series B?

#120

Post by brador »

vog wrote: post #28
reitzensteinm wrote: post #7

So I went through their checkout process, and up until the credit card stage there is zero indication that it's a membership site (I read everything on every page). I've uploaded the credit card section here: http://i.imgur.com/3di93.png It says you'll be billed month per month on the right hand side under the VIP membership program, but I think it's pretty clear that the page is engineered to be misleading. It looks…

I don't know about the US, but here in Germany you can't put that kind of stuff into your terms and conditions. Well, you could, but those terms would be ineffective. Of course, this doesn't help if they succeed to intimidate the victim. But if the victim doesn't pay, there's nothing the scammer can do, because this case would never succeed in court. Having said that, it might help if the victim complains to the poli…

Simple solution is check your CC statements regularly for discrepencies and request a chargeback from your card provider if you get scammed.

Enough charge backs and they lose their merchant account.

Most Credit cards users don't realize just how simple it is to run a charge back. It is literally one short phone call.

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