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)
And isn't this more something for small claims court? You save a lot on lawyer costs that way.
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.
Because they talk the game.
For example, here's Reid Hoffman, another VC on a pedestal:
"When I graduated from Stanford my plan was to become a professor and public intellectual. That is not about quoting Kant. It's about holding up a lens to society and asking 'who are we?' and 'who should we be, as individuals and a society?"
But then he went on to be a major funder of Zynga, which in its heyday was a scummy, spam business. Everybody knew it. Made his money and got out. Now it seems LinkedIn resorts to many of these same deceptive tactics, as evidenced by recent HN articles.
I don't understand why we hold these individuals in such high regard.
PG's response is here:
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.
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.
But so many precedents already exist. It's this wicked modus operandi for fast growth that a hefty amount of startups go by. You trick users in early in the game (browse around http://darkpatterns.org for examples), when you have attained a large group of users, you distance yourself from your past activities. Common excuses range from "we were young then!" to "we didn't think we were actually misleading users because of this $xyz technically". And of course there's the plain refusal of accepting that any misdeed was ever done.
A lot of the established companies right now grew and expanded precisely because of the dark models. I mean, hey, they just work. My favorite example: http://darkpatterns.org/library/privacy_zuckering/. What's really great is FB can make a great fuss that they're better about the interface now... and the thing is, it doesn't matter. It's a large company, it's established, now it'll continue to sustain itself in a network effects fashion with misleading interface or not. The lesson learned is, just do it, say sorry later. It's like when banks knowingly involved in predatory practices do the calculus about how much the fine for some wrong-doing might be, and usually going for it because the reward attained will be many times bigger than the fine they'll have to pay. Except in this case there is no fine, maybe just some pesky comments rebuking you in some forum.
All joking aside, I agree 100%. Where is the tech journalist crowd when like this happen? Are they afraid that they'll get a bad rep with other VC and then not get future stories?
"This model has seen some controversy around how transparent charging is, but JustFab has stuck to its guns in this area."
OK, no need to investigate then! Bravo journalism.
Karma's a bitch, make it hurt.
I'd be delighted if we could hear his take on the class action lawsuit.
Mark Pincus bragged about installing crapware/malware on his customers' computers and did "every horrible thing in the book" and the valley and tech journalism mostly laughed it off. This kind of shit is no big deal here and every day I'm more and more skeptical about whether or not these companies are actually creating value.
Edit: But really though, has anyone else noticed how sour everyone is starting to get about the current tech-boom? Everyone except founders and investors anyway.
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.
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.
I will add that to protect yourself from these and other payment related issues online, have a special low balance card or get one-time card numbers. I know most savvy members on HN already do this but just mentioning it in case.
I just tossed this crappy example together: http://imgur.com/fxw9xJJ but that one shows it's pretty clear that you are signing up for something optional in order to Save Money Now. There must be some kind of quid pro quo so people aren't being totally suckered.
That's just one thing; there are a lot more things I think are unethical. I wasn't really convinced this site was a scam until the investor used that screenshot to prove it wasn't.
That's sloppy. You'd think with $40 a month for shoes (wat) they'd be able to hire a proof reader.
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.
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.
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.
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.
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.