Why can a scam company raise $40 Million Series C + $76 Million Series B? • Hacker News Board

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

#61

Post by nthitz » Fri, Sep 27, 2013, 7:15 AM UTC

karterk wrote: post #29

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…

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…

Agreed. Only at the very end of the right column which most users will not read to is the mention of the charge. "Activating your VIP service" could easily be interpreted as being free given the purchase. Regardless of their numbers, it is definitely not obvious that there will be a monthly $40 charge. (The fact that they do give a credit for the charge makes things not 100% scummy I will say)

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

#62

Post by foobarbazqux » Fri, Sep 27, 2013, 7:15 AM UTC

karterk wrote: post #59

jdh wrote: post #42

Earlier quoted context omitted.

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…

It does not try to position it as anything other than a subscription, and the language is plain english. Yup, plain english which is pretty loaded in the favor of subscription. Point me to one heading which says "VIP subscription costs only 39 USD per month". every retailer has to optimize their site to perform This is not the same thing. The typical shopping site constitutes of 1 time purchases. When I google for a…

> We can argue over the fine details, but you can't convince me that this is not shady.

He's not trying to convince you, he's trying to convince himself.

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

#63

Post by arcatek » Fri, Sep 27, 2013, 7:17 AM UTC

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…

> I would submit that, when you come to view the site under the lens of clicking on a discussion about a fraud, and then go to it to decide if it is a fraud, and you (probably) aren't a likely customer and don't think "damn, that's a hot pair of boots for $40", you end up with a different lens.

That's exactly the problem. We're aware that the website is trying to make us suscribe to a VIP program, and so we look for it on the screenshot you linked. A lambda user will never do it.

Frankly, I'm not a designer, but this screenshot is exactly what I would do if I wanted to make the block go unnoticed : did you notice that he is at the right, a place where usualy go ads?

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

#64

Post by mehwoot » Fri, Sep 27, 2013, 7:18 AM UTC

Because it's not technically illegal what they are doing and they're doing it successfully. If there are people who think it's ethically ok to run a website that way, then there are probably people who will invest in it.

To me, it seems borderline.

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

#65

Post by paulftw » Fri, Sep 27, 2013, 7:18 AM UTC

karterk wrote: post #29

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…

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…

Second that. Smallest font on the page, light grey while everything else is black, pushed to the bottom of the side column - certainly looks like fine print to me.

There's no option to opt out of VIP membership - if I haven't said I want it, and was not asked whether I want it, I shouldn't be paying for it, should I?

I think OP has a case here.

Do they ever try to remind customer about the upcoming charge?

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

#66

Post by adir1 » Fri, Sep 27, 2013, 7:20 AM UTC

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…

Wait a minute, if they are leeching so much money (even if some are supposed 'credit for future') from (mostly) unsuspecting Customers - WHY did they need so many millions from Investors also, in series B and series C also?

Also - Aren't you worried that Credit Card processors (Visa, MC, Amex) will decide to just Cut Them Off permanently, due to excessive complaints? That has happened before to other "legit" recurring payments establishments. This is especially true if they Charge for "future" products, that is collect fee and don't Ship any product.

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

#67

Post by Semaphor » Fri, Sep 27, 2013, 7:21 AM UTC

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…

I'm not 100% sure but I think this site would not be allowed in Germany because of consumer protection laws. In that regard it's very telling that justfab.de has a very different checkout:

http://imgur.com/uIZ5JX3

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

#68

Post by Livven » Fri, Sep 27, 2013, 7:22 AM UTC

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…

It's easy. The price for that pair of boots is displayed very prominently, as you'd expect from a shopping cart page. So why is the price for the recurring monthly subscription only mentioned in the longest paragraph of text on that page and not highlighted in a similar way as the shopping cart price?

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

#69

Post by avalaunch » Fri, Sep 27, 2013, 7:22 AM UTC

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 membership when they originally clicked through to buy a single pair of shoes.

The entire checkout process is engineered to get people to sign up for the "VIP Membership Program" without realizing what it is. If they wanted to be up front about it, they'd explain it on the home page. They'd include it in the list of items that you're purchasing. They'd include the relevant terms (not just a link to them) on the page where you enter your credit card information. They'd put the terms higher on the page so that you're more likely to read them. They'd put the "Checkout as a regular member" link next to the "normal" checkout button and they'd make it just as big. And they'd make it a button. They don't do any of these things.

When a user goes to checkout of any online store, they're not going to read everything on every page. It's a process they're very familiar with so they're going to skim and click through quickly. I know this, you know this, and JustFab knows this. That's why the program details are listed on the first page of the checkout process and not the last. That's why they're listed on a page where the user has but one action to take. Click the big pink button and get on with the checkout process.

JustFab is not an awesome company as you claim. It is a scam and you are a horrible investor for investing in them.

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

#70

Post by Tichy » Fri, Sep 27, 2013, 7:22 AM UTC

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…

Are you kidding? Even though I knew what I was looking for in that image, it took me a long time to find the information that there will be a charge every month. It is at the very bottom of the page, in the fine print.

I believe you that you believe in the honesty of the company, and that you have the best intentions. Clearly this semi-scam works for you, but if you really want to feel good about yourself, I recommend stepping on that companies toes and make them present the information in an obvious way.

Also wondering about the law - I am pretty sure that here in Germany that kind of thing wouldn't fly, meaning customers wouldn't be obliged to pay up (although some probably would because they don't know that). Are there no customer protection laws in the US?