
JustFab.com JustFabulous Class Action Lawsuit (2011) - jacquesm
http://www.scambook.com/blog/2011/10/justfab-com-justfabulous-class-action-lawsuit/
======
thegna
JustFab was founded by Don Ressler and Adam Goldenberg in March 2010. (0, 1)

Series A round of $33 Million was raised in September 2011 (2), led by Matrix
Partners' Josh Hannah @jdh (3), Technology Crossover Ventures participated.

A national class action lawsuit was filed against Just Fabulous, Inc. in
October 2011 (4).

Series B round of $76 Million was raised in July 2012, investors included Rho
Capital Partners, Matrix Partners, Technology Crossover Ventures, Intelligent
Beauty (2)

Series C round of $40 Million was raised in September 2013, investors included
Shining Capital, Technology Crossover Ventures, Rho Ventures, Matrix Partners,
Intelligent Beauty (2)

(0) [http://www.matrixpartners.com/entrepreneur-
stories/adam_gold...](http://www.matrixpartners.com/entrepreneur-
stories/adam_goldenberg/)

(1)
[http://en.wikipedia.org/wiki/JustFab](http://en.wikipedia.org/wiki/JustFab)

(2)
[http://www.crunchbase.com/company/justfabulous](http://www.crunchbase.com/company/justfabulous)

(3) [http://www.matrixpartners.com/team/josh-
hannah/](http://www.matrixpartners.com/team/josh-hannah/)

(4) [http://www.scambook.com/blog/2011/10/justfab-com-
justfabulou...](http://www.scambook.com/blog/2011/10/justfab-com-justfabulous-
class-action-lawsuit/)

~~~
mcv
So how did that class action lawsuit work out?

And isn't this more something for small claims court? You save a lot on lawyer
costs that way.

~~~
jplewicke
That works well for getting just your money back. If you're upset about the
whole thing and want to shut it down or get their business practices changed,
a class action lawsuit is the way to go.

------
nakedrobot2
It sets such a terrible precedent that a company like this can raise so much
money. And that the VC's involved can't admit that there is, at the very
least, a "dark pattern" involved in luring unsuspecting people to pay what
they do to justfab.com.

On the other hand, the Series B is closed, and no one involved really gives a
damn what we think about these dark patterns and scammy activities. However,
we CAN publicize it, and expose the investors involved for the unscrupulous
and amoral people they apparently are.

~~~
nolok
YC funded and PG defended a company whose entire business model is "let's
spread crapware using opt-out checkboxes in installers that most people will
not pay enough attention to". This is nothing new, I don't know why people
seem to expect VC to be of better virtue than others means of founding a
company.

~~~
jacquesm
That would be this one:

[https://news.ycombinator.com/item?id=5059806](https://news.ycombinator.com/item?id=5059806)

PG's response is here:

[https://news.ycombinator.com/item?id=5092711](https://news.ycombinator.com/item?id=5092711)

It's not as strong as I would have liked but it is definitely a _lot_ better
than the one by the Matrix partner wrt justfab.com, for instance, PG actually
leaned on the company to improve their practices somewhat.

~~~
brador
It's interesting how that one borderline investment seems to have tainted PGs
brand of percieved ethical investment. It's risk profile is no longer bounded
by the company door, but affects the Ycombinator brand as a whole for future
startups.

~~~
jacquesm
It's a case of damned if you do, damned if you don't. He could have simply let
it go but instead chose to stand up for his investment. This in turn led to a
careful parsing of his words and as far as I can see short of divesting or
distancing themselves from the investment (which would be unprecedented) still
sent a strong message. In for a penny, in for a pound. I am assuming that
future YC companies will be looked at a lot better from an ethics perspective
and PG's personal and YC's investment involvement with Watsi more than makes
up for whatever ethics dent he might have received here.

On a set as large as YC's it should not be surprising there is at least one
bad apple either. It's no excuse but it is also not nearly as damning as it
could have been, witness that other justfab.com thread for a nice example.

------
pyalot2
Hmyeah, so Josh Hannah @jdh (A series investor in JustFab) was defending
JustFab in this other thread
[https://news.ycombinator.com/item?id=6455575](https://news.ycombinator.com/item?id=6455575)
how it's totally not a scam, backed up with a screenshot, clearly showing it
to be scammish.

I'd be delighted if we could hear his take on the class action lawsuit.

~~~
ianstallings
I would hope that his lawyer got involved, for his sake, and told him to shut
the hell up.

~~~
FireBeyond
Why would you hope that? This is someone who has made money from this
situation, and if it is a scam (which I strongly believe it is), I don't see a
lot of value in 'well, for his sake I hope his lawyer told him to be quiet'
(because God forbid he demonstrate guilt or complicity in fraud...)

~~~
ianstallings
It's just a phrase, jesus, ease up on the INTENSITY coffee. I don't actually
hope anything. It's like saying "well one would think".

~~~
FireBeyond
I'll give you that - in hindsight it did come across as a little leaping-down-
your-throat. Duly noted!

------
jacquesm
Justfab makes the most scammy pornsite look good.

Not only do they scam you on the way in, they also scam you on the way out,
canceling with them is just about impossible.

Credit card companies have pretty strict rules about this sort of thing and I
would really like to know if they are burning through merchant accounts, are
labeled high risk (with associated fees) or if they are around the industry
norm for e-commerce when it comes to chargebacks, refunds and customer
satisfaction within the cohort that does not get something delivered to their
door each month.

I suspect (but don't have proof) that if the 200K or so silent subscribers
(those who don't opt out but also don't get anything delivered) were attended
to the fact that there is a silent charge every month that they would cancel
en masse and do approximately 1.2 million chargebacks (the costs of those
chargebacks alone would take out justfab.com like a pin takes out a balloon).

The bottom comment in that thread about the class action is a nice sample of
what this company stands for:

"I have been repeatedly trying to cancel my membership with JustFab.com for 5
months. Every time I call the customer service rep continues to try and
diswade my request to the point of 10 full minutes at which point I always
tell them “JUST CANCEL MY MEMBERSHIP” and hang up. I believe they are paid
commission on every call they take that results in a hang up. I’ve emailed
repeatedly and they just won’t cancel and continue to bill me. I am putting a
complaint through my credit card and I am hoping this will stop these illegal
business practices."

If you're a victim of this scam please realize that:

1) you have consumer protection agencies where you can file complaints

2) you can charge back up to 6 months and every chargeback will cost justfab
an additional $25 to $35 per charge on top of the refunded money. In case of
3D secure transactions the initial charge was equivalent to a 'card present'
transaction but subsequent rebills _are not_ and you should be able to get
those back anyway.

3) if the number of chargebacks goes over certain absolute numbers there will
be an investigation and if it goes higher still there might be a cancellation
of the merchant account

4) that you can help by telling your friends about the scam, making sure not
to turn it into accidental advertising for them

And even if you're not a victim of this scam:

5) you can probably save yourself money if you go over your credit card
statement to look for charges like these.

I'm working on a blog post about the venture capital world as seen from the
other side to cure some common misconceptions about the type of people that
are active in venture capital, this whole story has me wondering if there
wouldn't be more good in doing a 'VC's I won't work for' post instead. Yuck.

~~~
jasonlotito
Thank you for saying what I had came here to say. Just for context, here is a
part of the check out page on JustFab:

[http://imagesup.net/?di=15138026329215](http://imagesup.net/?di=15138026329215)

This was provided by a Series A investor in JustFab† and was used to help
suggest that it's "pretty clear" that you are joining a membership for $39.95
a month.

Compare this to a slightly different crop, where we only include the portion
of the page that contains the "Order Summary", the thing you are ordering.
Nothing suggests or hints at a $39.95 membership.

I worked for 10 years in the credit card processing industry handling adult
sites. Even we never did anything this bad.

I mean, even the investor flat out admits that it's not called out in any way:

"in the same font size as everything else on the page"

Anyways, really just wanted to thank you for posting what you did.

†
[https://news.ycombinator.com/item?id=6455575](https://news.ycombinator.com/item?id=6455575)

~~~
James_Duval
Wait, " _your_ are activating your VIP Membership"?

That's sloppy. You'd think with $40 a month for shoes (wat) they'd be able to
hire a proof reader.

~~~
jacquesm
Good eye! And if they would actually send out shoes every month to all their
subscribers I don't think there would be a problem. Instead you get credits
that can only be spent with them and that can't be redeemed for cash. The vast
majority of those will in the long term simply never be redeemed at all.

~~~
jonny_eh
Just like Audible. Do you get a max number of credits, resulting in paying a
monthly fee for no new value, like with Audible?

------
crag
The best (and it really is the best) is to get the word about. Drive this
"website" into the ground. The VC's will lose money. And maybe, just maybe in
the future they'll think twice about investing in questionable companies.

------
onebaddude
A good example of this "membership" model done right is Audible.

[https://www.audible.com/](https://www.audible.com/)

 _How it Works_ and _About Membership_ featured prominently at the top of the
page. When you're signed in, your membership status is front and centre.

This isn't even difficult.

~~~
esw
That's how Audible is doing it _now_ , however it wasn't always this way. For
reference, see
[http://darkpatterns.org/library/forced_continuity/](http://darkpatterns.org/library/forced_continuity/).

~~~
jacquesm
Audible's response (on that very page) is actually a textbook example of how
to deal with a thing like this.

~~~
esw
It is, and I'm glad they've changed it. Having said that, this happened to me
in 2003 or 2004 - so this wasn't a simple UI goof that they fixed a few months
later. Additionally, the process for unsubscribing at that time required a
phone call. In any case, the experience left me permanently sour on their
company.

~~~
FireBeyond
Analogous: LA Fitness. You can become a member online, over the phone, in
person.

To cease being a member, you have to send a certified letter to a certain
address, and you have to make sure it arrives by a certain time (up to two
weeks) before your next renewal date.

I read an interview where one worker said they literally had someone whose job
was to throw away all non-certified mail, unread.

------
dools
This is analogous to a premium SMS subscription, and free2play mobile games.
It took 10 - 12 years for regulation to kill premium SMS scams. I guess the
next decade will be spent stamping out these scum.

~~~
grzaks
There are still a lot of them. All those "you won iPad" mobile ads are nothing
more than premium SMS scams.

------
jacquesm
This thread and the companion thread about justfab.com have just been flagged
straight from the homepage. Too bad, this sort of thing is well worth
discussing. Being successful should not translate into 'get money from the
customer at any cost'.

------
karterk
October 2011 is some time back. Anyone knows what's the status of this
lawsuit?

------
andrewaylett
Note that this was filed in October 2011.

~~~
jarofgreen
Anyone got updates?

------
mcantelon
According to WikiPedia, they reached 10 million members this year. If it's
true (I have my doubts) that'd be $400M/month membership revenue.
[http://en.wikipedia.org/wiki/JustFab#History](http://en.wikipedia.org/wiki/JustFab#History)

This could be a huge story for some journalist, finding out how they're not
getting cut off by the credit card companies, etc. The fact the president is a
quasi-celeb (Kimora Simmons) would help sell the story.

------
theklub
Beyond everything else it always shocks me as to how many people buy shoes
online. I mean I can never find ones that fit well in the store never mind
taking a shot in the dark with some no brand cheapa __shoe.

~~~
TillE
All the reputable sites will let you try on and return items for free.

Also if you have a pair of shoes that fit you well, it's likely that other
shoes from the same brand will fit similarly.

------
nakedrobot2
With all that money raised I guess the founders have taken enough money off
the table that they couldn't care less about what might happen now ...

~~~
jacquesm
Founders of companies raising series-C have not generally taken a lot of money
of the table unless they were explicitly permitted to do so by some investor.
Given the nature of this business you'd have to wonder about the trust level
between the operators of justfab and their investors.

------
DanBC
Does anyone run text analysis on the comments of this kind of site? Astro-
turfing detection would seem like a fun blog for someone to run.

------
dreamdu5t
...just take it to 4chan and the news media. Courts in the US are useless to
regulate businesses now... just look at check cashing fee class action
lawsuits.

------
grzaks
Dark patterns are everywhere and a lot of huge companies are using them
without any shame. Take ryanair reservation funnel for example.

------
carsonreinke
Reminds me of BMG Music Club

~~~
jacquesm
Book clubs and music clubs make it at least fairly clear that they are
subscription based. For example:

[https://subscribe.hearstmags.com/subscribe/splits/oprah/opr_...](https://subscribe.hearstmags.com/subscribe/splits/oprah/opr_sweeps_layer)

The text is _very_ clear here. Contrast that with the justfab.com language and
lay out, on the Oprah site (I can't believe I'm linking to that anyway) the
text with the warning sits right between the button and the body text,
interrupting the flow of the reader to draw attention to the text, it is also
the item closest to the button.

The 'happy flow' clearly includes the warning.

~~~
choult
They also deliver a product so at least you know you're being charged...

(Edit: Spelling)

------
3am
Are there any YC companies that compete with JustFab?

------
scrrr
Why enter a subscription to buy clothes? There's thousands of websites to buy
clothes from. Without a subscription. Amazing.

~~~
jacquesm
Because it isn't obvious that you're entering into a subscription. That's sort
of the whole point of this class action lawsuit.

------
jdalgetty
This link is from the end of 2011. Why is it at the top of the front page?

~~~
thegna
[https://news.ycombinator.com/item?id=6455391](https://news.ycombinator.com/item?id=6455391)

