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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?

#21

Post by htmltablesrules »

Mvandenbergh wrote: post #11

This looks pretty clear in the FAQ on their website. Every month that you're a member, you have the option to buy one of that month's items at a discounted price. If you don't take that option, you get a credit to buy additional items in subsequent months. If you don't want to sign up for the membership then you can select that option at checkout (and pay more). Did it take your girlfriend 8 months to notice this rec…

Riiiight. So I should have to scour FAQ pages and TOSs in order to disambiguate that this is an opt-out-only membership-type club with recurring charges? Go to their home page and tell me it doesn't look like another zappos. Does zappos continually charge me if I don't come back? No. Then click on "How JustFab works"...does it say ANYTHING about recurring membership fees? No, it makes the site seem to be just some kind customized shopping service.

JustFab isn't going to help disambiguate their business model up front because that would hurt their bottom line.

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

#22

Post by wenxun »

Mvandenbergh wrote: post #11

This looks pretty clear in the FAQ on their website. Every month that you're a member, you have the option to buy one of that month's items at a discounted price. If you don't take that option, you get a credit to buy additional items in subsequent months. If you don't want to sign up for the membership then you can select that option at checkout (and pay more). Did it take your girlfriend 8 months to notice this rec…

My girlfriend was studying in the US at the time, she didn't have a SSN, she was using a visa card issued by the china construction bank, her father paid the bill every month and didn't notice anything unusual. She finished her study and returned back to China last month, only then did she find out the $39.95 charge for the last eight months. Basically JustFab robbed her $320 for nothing.

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

#23

Post by chinmoy »

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…

Thanks for the screenshot. This is outrageous IMO. Few people will notice that the TOS checkbox actually reads "JustFAB VIP membership program". Most people will take it as a normal TOAS checkbox that you have to agree every time you order from any website. So, yes, the page is designed to be misleading a.ka scam some subscription fees.

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

#24

Post by cantankerous »

davewiner wrote: post #6

It may be harder than you think to get the credit card company to stop the charges. http://uncrunched.com/2012/08/26/my-undead-credit-card/ Like it or not they have a good business model. And the VCs probably don't care if they're ethical, as long as they get a good ROI.

Some VC information on this page if you're interested.

http://www.crunchbase.com/company/justfabulous

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

#25

Post by raphman »

reitzensteinm wrote: post #16
robryan wrote: post #14

Earlier quoted context omitted.

So the site doesn't force you to join the VIP program? The way it is structured would definitely see a lot of people check it and click through without checking. In my experience stuff we make a lot more obvious than this is plain ignored during checkout.

Just tried it without the checkbox ticked, and it does appear to be mandatory. "You must read and agree to the JustFab VIP Membership Terms of Service." Which makes sense - I bet they're making a killing on zombie subscription fees and little on legitimate users.

And there does not seem to be any opt-out option in the profile settings (at least not without having completed checkout).

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

#26

Post by braveheart1723 »

class action lawsuit - dated oct 2011 though - http://www.scambook.com/blog/2011/10/justfab-com-justfabulou...

and some more people with similar stories:

http://www.consumeraffairs.com/online/justfab.html

http://www.scambook.com/company/view/146/JustFabcom

http://forum.purseblog.com/the-glass-slipper/justfab-com-sca...

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

#27

Post by Ntrails »

jonnathanson wrote: post #8

This business model reminds me of those fly-by-night mobile subscription services from the early 2000s. The ones who'd make you think you were buying a single ringtone, and the next thing you knew, you'd been surreptitiously signed up for a $29.99/month subscription. I remember evaluating the books for one of those companies back in the day. It was wildly successful at the surface level. But if you dipped below the s…

It reminds me more of the book catalogues. 5 books for a pound or something as a joining perk, but you then had to buy a book a month for 6 months or they would automatically sell you the default book etc.

I never thought that was a shady business model, per se, and whilst it wasn't entirely intuitive how they worked to a 14 year old, I blamed myself for screwing up by joining- not the company.

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

#28

Post by vog »

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 police. Depending on how serious customer protection is taken in the US, this business might be more than merely "unethical".

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

#29

Post by lysol »

Pretty terrible of Techcrunch to have a favorable article about it: http://techcrunch.com/2012/04/26/fashion-retail-and-styling-...

That shit is poisonous to the startup sector, some people already think it's some kind of voodoo and this kind of thing doesn't help.

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

#30

Post by nhangen »

You would think that if any page explained how the program worked, it would be this one: http://www.justfab.com/how-justfab-works.htm

but I didn't find a single mention of membership fees on this page.

I'd heard a lot about this company, but had no idea what they were until now. Disgusting.

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