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 wasn't able to tell right away from the screenshot, even while knowing ahead of time. I must tip my hat to say that this is a brilliantly executed dark pattern. It is a myopic move on their part because even though they will make some money now, these types of tricks never last in the long run. Plus no one likes to be tricked so these people won't simply roll over, they will be out for the trickster's head.
I'm not the first to jump up for more regulation, and for something like this I'll be the first to admit that it's my responsibility to read the fine print, but this is very deceptive. A line needs to be drawn somewhere and customers need to be protected once it is crossed.
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.
Even if you default to opt-in you can make it clear what's going on.
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.
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.
Wow. The first time I looked at the image of that page (and mind you I actually spent about 20-30 seconds on it), I definitely thought it was just $39.95 for that pair of shoes. Did not realize at all that it was for a membership. And I like to think that my attention to detail is pretty strong... That's disturbing!
The thing that riles me is that this exact thing turned up on HN 1 year back [1] (and hit the front page), but nothing has changed since then. They continue to screw people.
Worse yet, they picked up another round of venture capital. Which makes you wonder how they manage to lose so much money if they are basically scamming people to the tune of 96M per year (200K x $40 x 12). Maybe the customers are not the only ones being scammed. One can hope...
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.