As crazy as this is, this is an old technique from the adult video (Porn) industry. Recurring charges that also can't be disputed with either the company or the issuing credit card company.
Why was a scam company able to raise $76 Million Series B?
41–50 of 185 posts
Re: Why was a scam company able to raise $76 Million Series B?
#42[deleted]
Re: Why was a scam company able to raise $76 Million Series B?
#43Yes. This is called "negative option billing" (http://en.wikipedia.org/wiki/Negative_option_billing). We (at BillGuard) see many people that fall into these kind of shady business models. It's pretty amazing that this is still legal and VCs are throwing money at it.
Re: Why was a scam company able to raise $76 Million Series B?
#44This 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.
As a child my father had pointed out to me that those book offers (in the UK at least) were only for adults (18 and over). So I used to fill in the form without ticking the 'I'm and adult' box, and see if they sent me the books. Most did, though as I was a minor they had no recourse to ask for payment. If only you'd contacted them and told them you were too young to sign a contract!
Re: Why was a scam company able to raise $76 Million Series B?
#45Pretty 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.
I have many concerns about TechCrunch. They are the CNBC of the tech community (essentially a mouthpiece for those that pay). All we need now is an expose like http://www.youtube.com/watch?v=gMShFx5rThI
Re: Why was a scam company able to raise $76 Million Series B?
#46Don'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'…
This is the best suggestion, but unfortunately may not be possible for them to recover everything depending on how they paid/their credit card company. Most banks only allow you to do a chargeback for charges within the last 1-2 months on debit purchases and 6 months on credit card purchases.
Re: Why was a scam company able to raise $76 Million Series B?
#47So 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…
Maybe I'm being too permissive, but that screen doesn't look fishy at all. I went through the purchasing/sign-up process, and it goes like this: 1. create a profile (answer questions on style) 2. fill in details, click a *JOIN NOW* button 3. get a "*first month* for 50% off" offer 4. get to this payment screen At no point it implies you are buying a single product, there are no "buy now" buttons or calls to action. T…
It would seem reasonable that to assume "skip the month" just means "don't buy anything this month" as opposed to having to do a specific action.
After all , it would seem strange to be voluntarily charged unnecessarily.
Re: Why was a scam company able to raise $76 Million Series B?
#48Earlier quoted context omitted.
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.
But at least the book clubs (at least the ones that I know) make it obvious that you sign up for a membership and have to buy something (monthly or yearly). This site seems to be entirely designed to mislead you into thinking you're just ordering one item, while in fact you are signing up for a membership. Signing up for the first one (book club) may be a bad business decision on the customers part, but this second s…
>This site seems to be entirely designed to mislead you into thinking you're just ordering one item, while in fact you are signing up for a membership.
Bingo!
Re: Why was a scam company able to raise $76 Million Series B?
#49There are hundreds of websites that operate the same way. JustFab's membership fee is higher than any other that I've heard of, but there are tons of websites that are built around the idea that most people who shop online don't think to read the fine print. While in most cases the burden of responsibility should fall on the buyer, I think it's perfectly reasonable for a person to assume that when they buy a product from an online store, that they aren't going to be automatically enrolled in a membership program. I really hope that in the near future, people who run such businesses will start getting thrown in prison where they belong.
Re: Why was a scam company able to raise $76 Million Series B?
#50It doesn't seem out of the question that a funder could be just as dishonest as this company.