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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?

#381

Post by Nitramp »

Never invest in a company that doesn't provide a genuine profit to its customers (and other stakeholders). Businesses are cooperative relationships between stakeholders, if a business just exploits its customers, it won't be a business very long.

Whether the checkout page is deceptive or not (and it is!): does anyone actually want to get a 40$/month minimum 1 year membership? Who would want to buy all their shoes on this one particular website, an willingly enter a contract where they have to click a button once per month or get a 40$ penalty? That's just bogus, all of the conditions are so strongly in favour of the vendor that it's clearly not a business - it's just exploitation/a scam.

You might be able to make a quick win and run away with something like this before the business falters, but more likely you won't be that lucky.

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

#382

Post by gergles »

sgustard wrote: post #22

Their "how it works" page explains this, with far fewer than "2500 words", though it could be clearer. http://www.justfab.com/how-justfab-works.htm They have 2 million likes on Facebook. Were all these users scammed? The "monthly subscription" has recently been a hot e-commerce category. Other sites with a similar model are shoedazzle.com, fabkids.com, musthave.popsugar.com and so on. See: http://www.quora.com/E-Comm…

The salient difference between JustFab and any other "of the month" club is that you don't actually get anything every month. You get a JustFab fun buck that is only usable on their site and they go to great lengths to hide that you're suddenly buying those. In a "__ of the month" club, you get a physical thing dropped on your doorstep every month that reminds you of the recurring billing relationship.

In my opinion, JustFab deliberately deceptively does not give you anything to remind you of the price you are paying and therefore is a scam.

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

#383

Post by ds_ »

GrinningFool wrote: post #362
ds_ wrote: post #325

Earlier quoted context omitted.

There was already a refund request process in place, preempting the inevitable complaints. They knew they were misleading people so they could make money on the back of those that aren't too attentive to their bank statements. I suppose everyone down-voting me thinks that's just great?

Nope. EVeryone downmodding is well aware that Amazon doesn't hide the subscription - in plain sight or elsewhere. When you sign up for prime, you know that you're signing up for a subscription service. There's no doubt. Things like "try it free for 30 days" in bold letters make it very clear. I've also never seen a default behavior of enabling prime.

"Try it free for 30 days" is very different from "Try it free for 30 days but if you don't cancel, we'll charge you from then onwards" - especially when Amazon already have my card on file from previous purchases.

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

#384

Post by antihero »

cs702 wrote: post #278

JustFab is not a 'scam company' (in the sense that they may not be doing anything technically illegal), but they are using DARK DESIGN PATTERNS[1] to trick at least some people into doing things they don't want to do. The checkout page[2], in particular, seems designed specifically to trick people into signing up for recurring monthly charges. Any person who adds merchandise to the cart and then clicks the big 'Conti…

Wait, so actually OP's girlfriend would have had a bunch of credits they could spend on items, right?

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

#385

Post by sbov »

iggym001 wrote: post #371
DrJokepu wrote: post #287

Earlier quoted context omitted.

No, seriously, if your business model is based on tricking people into paying for something they don’t want and didn’t realize they’re getting charged for (no meeting of the minds), your company is a scam company. It’s simple as that.

exactly, a business model that tricks customers is not a business model, it is a scam and fraudulent

It really depends upon the percentages. From my experiences pretty much any website will trick someone, regardless of your intentions otherwise.

Despite having to: choose a price, click a "I agree to be charged $ every month" checkbox, and enter their credit card information, a subscription-based website I used to run still got emails from people complaining, saying that they didn't want us to charge them yet.

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

#386

Post by legitsource »

aqme28 wrote: post #374
nugget wrote: post #184

Earlier quoted context omitted.

You can also file an action against them in your local small claims court. Depending on where you live, it takes about 30 minutes to fill out the form and costs around $25 in filing fees. Most likely the company will not respond to your complaint, and you will receive a judgment for all of the money you paid them. Assuming they don't go bankrupt, they will eventually pay you and satisfy the judgment. I did this again…

Why? A chargeback is basically an automation of that process, with the full backing of your credit card company.

If corporations are going to run the system, you might as well get some benefit from having a large one go to bat for you when you can.

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

#387

Post by tripzilch »

rurounijones wrote: post #32
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 VIP membership program information is not part of the eye flow from the checkout info to the nice big bright attention grabbing checkout button. * Nor does it immediately stand-out as "This is something you REALLY need to read" rather than just normal advertising for an opt-in premium package, * There is no "I have read and accepted the VIP stuff" checkbox in the checkout flow. User has to specifically opt-out…

> So, not fraudulent technically

It is in fact technically fraudulent in Germany, which is why the German version of the page looks different.

Still not super-clear on the details, but sufficiently "you're going to be billed each month" to let most people know it is a shitty deal, and the (pay once high price) alternative is clearly displayed at the same size (just not highlighted as much), at a high price to make people wonder "what's the catch with the other deal at 1/4th the price?".

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

#388

Post by aestra »

capex wrote: post #87
avalaunch wrote: post #69

Earlier quoted context omitted.

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…

Came to say this. I can smell class action against JustFab.

A class action lawsuit has already been filed.

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?

#389

Post by wtvanhest »

nolok wrote: post #211
davidjgraph wrote: post #158

Earlier quoted context omitted.

If you really believe a word you've just written, here's my suggestion. Change the page so that by default you're not joined up to the VIP program and shoppers have to specifically opt-in. If the text is as clear as you claim, you'll still get roughly the same join up rate because the deal is being made is brilliant and it's perfectly clear what's happening, right?

A note on this: I do believe the website to be a scam and parent to be obtuse or lying, but for the specific case of your comment studies have proved that people are more likely to stick with the default choice made for them, so you example wouldn't work. Even if the two offers were providing an absolutely identical end value, the default one would have more adoption.

Good point.

The reasonable solution would be to leave it the default option and just make it much more clear what is happening after you buy the shoes.

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

#390

Post by zazi »

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…

If what you say is true, Justfab isn't a scam company, and most of the customers know about the monthly fee, they should have no problems making the fee explicitly clear on the checkout page.

Why hide it like you are doing so now? In the sidebar, where ads are usually placed (and ignored), and in non-emphasized font.

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