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Why can a scam company raise $40 Million Series C + $76 Million Series B?

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Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#161

Post by ryan-allen »

farrel wrote: post #8

Because VCs aren't interested in building a sustainable business, only something they can dump on a greater fool in 3 - 5 years for 10x return.

The spin of the whole "disrupt everything" kind of cons the young and energetic in to do the hard yards before the flip.

You don't often hear about individuals making any kind of real difference in social areas of society that are hurting, yet if you build some kind of online service that provides some kind of marginal benefit you're cast as a hero as long as some cashed-up multinational buys you out?

I'm all for fun and profit, but I'll call a spade a spade, and all this flipping at the expensive of multibillionare corporations ain't really disrupting anything. Especially if the service is bought out and shut down, which appears to happen often.

It seems a nice safe bet is to iterate quickly on a niche that big-co is trying to break in to. They see you as a threat and their strategy is to buy you out and either a) integrate you, or b) shut you down completely.

Hooray for progress! Or is this the bad side of capitalism?

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#163

Post by halviti »

abalone wrote: post #154

Every single person who has been misled into signing up for a recurring charge should do this one thing: Dispute the charge with their credit card company. You'll get your money back and it will issue a bunch of chargebacks to JustFab, which will penalize them financially. If enough people complain their penalties will escalate and their credit card processing rates will go through the roof. This is how the credit ca…

Except for there is a time window for these sorts of things.

His girlfriend isn't going to be able to dispute charges that are 8-months old.

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#164

Post by ericd »

brazzy wrote: post #144
ericd wrote: post #6

Huh, sounds like a rebill scam with the lent legitimacy of VC funding.

> lent legitimacy of VC funding. Does VC funding really lend legitimacy to anyone except other VCs?

Sure, someone public who was given lots of money by big institutions voted for it with their money. There are a lot of fly by night operations doing this kind of thing, not many VC funded ones that I'm aware of.

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#165

Post by Erwin »

In DK (possibly EU) we have laws that mandate the actual total minimum cost to be prominently shown when you buy something and companies are regularly fined by the marketing board for misleading information there.

So if you buy a $1 cell phone, but it requires you to sign up for a 12-month $50/plan and oh, there's also several $5/month fees in small print -- then that's the total minimum cost you pay must be shown

For loan type products, the effective yearly percentage cost for the loan must be shown. So if you look at one of those typical "quick loans" like https://folkia.dk/ where everybody can get a loan..., well you an see that borrowing 3000 DKK for 30 days is going to cost you a yearly effective interest of 987% if you asked a bank for it.

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#166

Post by bane »

Lots of speculation about how hard this is for people to navigate, here's some examples of people bitten by this

http://www.elkgroveonline.com/forums/topic/105057/beware-onl...

and the text of the class action filed in 2011

http://www.scambook.com/blog/2011/10/justfab-com-justfabulou...

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#167

Post by smsm42 »

jdh wrote: post #42
karterk wrote: post #29

Earlier quoted context omitted.

Not the OP - but I did take a look at that page, and I do find it misleading. The "checkout as a regular member" is in a small font on the sidebar, while the main CTA is big, bold and defaults to the VIP program. The part where you're told about the monthly fee is in the last sentence of the sidebar. I had to practically hunt it to find it - for most people shopping online this will be oblivious. By giving the screen…

I don't accept the word "misleading" -- I do not believe the page in any way misleads. It does not try to position it as anything other than a subscription, and the language is plain english. Could they put the subscription details in bold? Could they use a larger font than all the other text? Sure. It's a tradeoff, for sure, and every retailer has to optimize their site to perform. Could they pop up three boxes afte…

The language is plain english, but the most important and un-obvious fact about it - that it is a subscription deal and not an one-time sale deal - is mentioned only at the end of the wall of text and is not clearly and prominently featured. It's like advertising a car for $100 and then at the end of 10 page small-print document (in plain english) adding "plus 36 payments of $500".

I am still giving you the benefit of the doubt and assuming you are sincerely believe that it is a legitimate business that does not use any blackhat techniques to trick their users. But with each your comment it becomes harder and harder. It is very hard to believe that a smart man - like without a doubt you are - would not understand what is going on here. Pecunia non olet?

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#168

Post by aspensmonster »

drakaal wrote: post #12
potatolicious wrote: post #10

Earlier quoted context omitted.

Whether or not this is a scam is unclear and dependent upon how clearly they tell you this upfront. We've seen enough evil UIs to know that there are many, many ways to hide this information such that a reasonable person would miss it.

I just went through it, on the buy page it says "To become a JustFab VIP Member, simply purchase any JustFab item on this Site and you will be automatically enrolled in the JustFab VIP Membership Program (including the monthly, automatic purchase feature). As a JustFab VIP Member, our experts will send you a customized selection of JustFab items on the 1st day of every month. You will also receive emails, newsletters…

It could be made even clearer:

"To become a JustFab VIP Member, simply purchase any JustFab item on this Site. Doing so will automatically enroll you in the JustFab VIP Membership Program. This program will charge your method of payment at the rate of $39.99 USD monthly, and in return, our experts will send you a customized selection of JustFab items on the 1st day of every month that you may choose from and pay for using this credit. Any remaining credit at the end of each month is rolled over into the next month. You will also receive emails, newsletters, special offers and other updates to maximize your shopping experience. Save up for a few months to get that pair of shoes you just can't live without! Any accrued credit is non-transferable and redeemable only through JustFab.com."

However, something tells me this version wouldn't fly during the board meeting.

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#169

Post by logn »

halviti wrote: post #163
abalone wrote: post #154

Every single person who has been misled into signing up for a recurring charge should do this one thing: Dispute the charge with their credit card company. You'll get your money back and it will issue a bunch of chargebacks to JustFab, which will penalize them financially. If enough people complain their penalties will escalate and their credit card processing rates will go through the roof. This is how the credit ca…

Except for there is a time window for these sorts of things. His girlfriend isn't going to be able to dispute charges that are 8-months old.

Then also file a complaint with the attorney general of a state in the US and the Better Business Bureau. Also write an honest Yelp review (make it fair and truthful but not slanted as you don't want to be sued over libel). All of those things matter a lot to businesses, in addition to their standing with credit card companies and banks.

Re: Why can a scam company raise $40 Million Series C + $76 Million Series B?

#170

Post by drcongo »

avalaunch wrote: post #69
jdh wrote: post #23

I'm the Series A investor in this company. We in fact have done plenty of due diligence, and you will be pleased to know it is not a scam company. In fact, the company has very high customer satisfaction ratings, including an NPS that is in the ballpark of Amazon, and a very high customer retention rate. More than half of the people who subscribe to the service are still subscribers after two years, which is unusuall…

The other commenters are being too nice in their replies. You're full of shit. JustFab is a shoe of the month club masquerading as a normal online shoe store. The VIP Membership Program is the essence of JustFab's business model and yet it's missing entirely from the home page of their site. It looks like any other shoe store. And yet you think it's clear that the user is being signed up for a shoe of the month membe…

I hope this ends up as the most upvoted post in HN history.
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