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

And generally speaking, things which "feel scuzzy", are.

There's no indication that they'll automatically send you the month's featured item or even email you about what it is and that you're about to pay for it.

Rather, they're silently selling you "Credits" expecting you to forget all about it until you happen to study your credit card report some month in the future.

Maybe not illegal, but definitely shady.

I also know that those dubious tactics were used to draw people in, but in the end there had to be explicit consent to the subscription model, hence they always emphasized the "you can cancel anytime" part.

JustFab doesn't do that. It crosses the line from "scuzzy" into "scam" by totally obscuring the fact that they are a subscription based service.

Her father was the main card holder, and she was using the second card, her father paid the bills every month as soon as he received the paper statement, he didn't notice anything suspicious.

You're shifting the blame away from the scammers.

Does VC funding really lend legitimacy to anyone except other VCs?

[3] https://news.ycombinator.com/item?id=4592778

You don't often hear about individuals making any kind of real difference in social areas of society that are hurting, yet if you build some kind of online service that provides some kind of marginal benefit you're cast as a hero as long as some cashed-up multinational buys you out?

I'm all for fun and profit, but I'll call a spade a spade, and all this flipping at the expensive of multibillionare corporations ain't really disrupting anything. Especially if the service is bought out and shut down, which appears to happen often.

It seems a nice safe bet is to iterate quickly on a niche that big-co is trying to break in to. They see you as a threat and their strategy is to buy you out and either a) integrate you, or b) shut you down completely.

Hooray for progress! Or is this the bad side of capitalism?

Did you read Amazon's review -- 1 out of 5 stars with 690 reviews, worse than JustFab's? http://www.consumeraffairs.com/online/amazon.html

I'm sure you'll enjoy 1SaleADay, with 5000 reviews and a 4 star rating! http://www.consumeraffairs.com/online/1saleaday.html

https://news.ycombinator.com/item?id=4592827

http://d.pr/i/ltch

Is how it works clear or am I missing something?

Here is their FAQ

http://d.pr/i/beRt

It takes over 2800 characters and 507 words before a single mention of a membership charge with no mention of recurring until the following paragraph.

Is that clear?

https://news.ycombinator.com/item?id=4592827

People go to JustFab to buy a pair of shoes, not to join a shoe of the month club. Check out their front page. It looks like a online shoe store. It doesn't mention the VIP program at all. That's tossed in during the checkout process and it's pretty easy to miss the fact that you're buying more than a pair of shoes.

http://www.sitejabber.com/reviews/www.justfab.com

http://www.scambook.com/company/view/146/JustFabcom

http://www.consumeraffairs.com/online/justfab.html

If you google "justfab review" or "justfab scam" or "justfab fraud", there are surely many more.

I think the class action lawsuit might satisfy your curiosity.

In my opinion, JustFab deliberately deceptively does not give you anything to remind you of the price you are paying and therefore is a scam.

When I sign up for TV service, Cable service, or Internet service I'm aware I'm signing up for a service. I wasn't made to believe that I was making a one time purchase, and being sucked into a service I didn't want or was aware I was signing up for. I presumably am aware I have cable and internet.

Nobody is criticizing them for not asking every month if they want to continue. They are criticizing them for tricking users into signing up for something they didn't want and didn't know they were signing up for!

This is an analogous situation. I walk into H&M and see some boots for a good price, and they have said they now only take credit card. Ok, no prob. I sign the credit card receipt and walk out the door. A few months later I notice H&M has been charging me $40 a month every month. I go back there and ask what's up with that? They say, well when you bought those boots, you signed up for our store club, you signed the credit card receipt saying you were signing up! You should have known, it was printed on the receipt! Signing a credit card receipt is part of a normal checkout worflow, and 90% of customers aren't going to notice if there is a subscription printed on there as well.

The point is, the store is set up to be a normal online store, and seems to go out of the way to hide that it is a subscription service.

Their lifeblood is the zombie customer who is completely unaware they've got a leech sucking at their credit card account.

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 screenshot - atleast to me, you have proved without doubt that the site is indeed misleading.

[Edit: grammar]

https://news.ycombinator.com/item?id=4592827

* Nor does it immediately stand-out as "This is something you REALLY need to read" rather than just normal advertising for an opt-in premium package,

* There is no "I have read and accepted the VIP stuff" checkbox in the checkout flow. User has to specifically opt-out by clicking a link no-where near the standard user flow.

So, not fraudulent technically but this seems like a clear case of a "Dark Pattern" and seems pretty scammy to me.

>It's in plain English, and in the same font size as everything else on the page.

The actual text saying "With this purchase you are activating your VIP membership program" is clearly smaller than the main text in the checkout (product name, prices etc).

> and the information is quite clear on the site.

Your opinion, I have to disagree.

[Edit] having seen the old page linked to by another user http://i.imgur.com/3di93.png is it pretty clear that the new page is much more deceptive (Old one had a checkbox requiring acceptance of VIP membership)

[Edit] Expanded opinion.

There are about a bajillion ways to make it much more clear what you're actually paying for. Not even complicated, "Well we need to hire a UX designer and do some study" type stuff. Just straight-forward, common sense things like adding the price of the membership as a line item.

So, yes, you've invested in a company which is actively hostile to its customers.

The eye is focussed on the "continue checkout" button and the information directly above it. The customer is urged to think about shipping options, not VIP membership.

Don't believe it's deceptive? Why not put a giant "VIP a monthly fee" line just above the Continue Checkout button, and see the change in sign-ups.

In the screenshot you uploaded, is a standard checkout screen you would see on any e-commerce site. The only difference is there is what appears to be an ad/upsell to some VIP program that I'm sure no one pays attention to.

I've done a lot of work in product & usability in the shopping/e-commerce space and in my opinion, this flow is intentionally misleading.

[1] http://darkpatterns.org/

You have to read all the way through to the last sentence at the bottom of the page, and then think back through what you've already read to piece together what you're signing up for.

They could have just said, "If you join our VIP program, you get to order one item from each month's showcase at no charge, for a $39.95 monthly membership fee. If you don't see anything in the showcase that you like, you have until the 5th of the month to opt out and we'll waive the fee for that month."

So yeah, it's not as bad as what the OP said, but it's still pretty bad.

Speculation: Women join the site based on word-of-mouth from other women, who tell them how it works. So that's why they aren't fooled. Women who aren't told beforehand how it works are probably like "WTF?" when they see it and are turned off by it, and some % of those are just going to click through, trusting that whatever that promotion is, surely this company is trustworthy and not trying to rip them off.

This is a combined "Forced Continuity" and "Sneak into Basket" set of dark patterns that doesn't even given you the in-line checkbox to uncheck:

* http://darkpatterns.org/library/sneak_into_basket/

* http://darkpatterns.org/library/forced_continuity/

See, there is the action (the orange checkout button) on the left box. Right below it are the shipping options. And then there's the VIP sidebar. It's "action" isn't in any discernable way a "button", it's a small red link. It's designed to be non recognizable as an "action" that is an alternative to the big orange action, and unless you actually read the sidebar, you won't know that the sidebar is also a checkout option display. Sidebars, for the most part, are not known to consumers to contain relevant information, because everybody stuffs sidebars with advertising.

I bet they'll never ever do that.

I casually discarded those, blaming it on the new-found business astuteness of the society I lived in, but it seems this kind of scam is still around.

I'm calling it scam because, where I live, this type of business was actually considered a scam, and I think this went to the extent that they passed legislation to ensure their activity is regulated. They were required to clearly state the subscription model, in a separate box, delimited with clear colors and a bright background. Needless to say, they died out in less than a year.

The website obviously works, and is profitable, because it deliberately misinforms customers, and I think investing in this kind of business is very short-sighted. Not for you directly, since I presume it will bring you enough profit, but for the economy at large: this kind of activity adds no value whatsoever to anything, no one's life is substantially and essentially improved, all that happens is that some money change hands without producing any meaningful result. It's an economic plague.

I'm not casting judgement on yourself for investing in this business, particularly since I'm not willing to start a debate (on the Internet, of all things) about the "but everyone does it" argument. But defending this kind of shady practice is pretty low.

(Edited the rather rude words that were initially there instead of "pretty low")

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.

http://imgur.com/uIZ5JX3

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.

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?

Remaining users: 200K * $39 / month in revenue.

So $8 million / month of recurring revenue through this programme. I wonder how the margin on that compares to the rest of the business ;)

That image you link contains the text 'if you don't take action between the 1st and the 5th of the month, you will be charged', how about 'unless you wish to buy another product you won't be charged' instead?

The whole flow of the page is set up in such a way to make it seem like this is a one-time purchase, if you wanted to play nice you'd make the payment button read 'continue to subscribe' instead of 'continue to checkout'.

Disgusting.

But lets break down exactly why that page is designed to trick a significant number of customers into purchasing something that they did not intend to purchase: * All the VIP information appears in a box that most shopping websites use for advertising or shipping FAQs. Many average readers (note that I do not say all), would fail to even glance at that box. * The 'checkout as regular member' button is in a completely different flow of the page, and of a different size. On the one hand, it would probably be ok for one of those two things to be true, but to make them both true they know that some customers will simply think there is only one checkout option when they scan the page. * By far the most scammy part of the page is the fact that the payment does not appear in the shopping cart or subtotal box! People reasonably expect that with online shopping, everything they will be paying for appears in the shopping cart.

Many of those things on their own would probably be ok. You could just claim that it is a page optimised for converting to the VIP program. However, the combination of all those things are designed not only to convert people legitimately interested in the VIP program, but to also convert a sizeable number of people that skim read the checkout page.

- When you buy shoes, you pay for shoes and not a monthly subscription. That's what people expect when they see 'Checkout'.

- Even after looking at the screen after reading this post, nowhere is it entirely obvious that I'm about to sign away $40 a month.

- reg $69, VIP $39. Looks just like a regular discount.

- I went through the checkout process, until the last payment screen. I don't notice anything saying that this is a recurring charge.

OP was being nice. This is dishonest and borderline fraud.

Edit: FRAUD.

The Office of fair trading would shut this site in a heart beat. (if it were based in the UK)

the checkout proccess is deliberately misleading, it implies that clicking checkout will by the shoes and nothing else.

Wrong. Investors decided that they can make money with a business with an obvious predatory business model. It might be good money - at least in the short run, in the long run you run out of stupid people as I have seen with other types of such businesses - yet it is a company with a terrible business model.

Yes, I have looked at the picture you provided.

Shame on you.

It is called breakage. If they do not expire now, they will start to expire soon. What good is it to accumulate some revenue, if you cannot claim it has no cost associated to it? Either you do not know what it represents, or you are playing a good card. Sorry for the sarcasm to start this, but it sounds fishy.

I have no ethical problem with sites that make it easier for customers to get an on-going service (a subscription), when it is more convenient to have it than the opposite. (cellphones, gas, electricity) In this cases, it is much more cool not to have to deal with $39 or whatever amount it is decided that the store wants to discount to call you upon that private VIP club. It is dirty pricing.

And yes, I did go to the link you provided, and I did noticed that it is not necessary to read 2,500 words to figure out that the company is walking a fine line in between ethics and law. Bravo, for the tack-team, probably composed of some 5th av creative minds and some hard knock lawyers.

But this does not exclude the fact that IF the site wants to be ethical, and IF it gets at least a very little percentage of its revenue due to this, it should try hard, very hard; to tell people that visit their site for their first time, that a little fuck you contract might fall in their lap that very day if they are not fully aware of what they are doing.

In fact, it it happened once, and you realize, it may be possible that it has been misleading, you should change it.

I really hope a more transparent player comes along and have you guys think about this very concerning issue deeply.

Sleep tight.

   "Plaintiff Edna Betances-Harold, on behalf of herself and others similarly situated,
    brings this class action complaint against Defendant Just Fabulous, Inc, based on 
    its practice of deceptively marketing and billing consumers for unauthorized 
    charges relating to its retail website."

Source: http://www.scambook.com/blog/2011/10/justfab-com-justfabulou...

This case is a clear "opt-out" case. If their offer is good enough, they could just explain why properly and people would opt-in. If they need to resort to this kind of tricks to get people enrolled, their offer is not so good and they are feeding on tricking the customers.

In any case, you should never trust a business resorting to these practices. These people won't have a problem selling your personal data whenever they (legally) have the opportunity, or doing anything even when its harmful for you (so long as it's legal). The parentheses are the differentiating point between "shady" and "scam" businesses.

This doesn't necessarily mean that you shouldn't buy from them occasionally (hello ryanair), but you should take every measure at your hand to avoid it and/or protect yourself from them. This includes using throwaway email addresses, refillable debit cards, etc.

If I happened to be an investor in that company, I would first push for good practices before it's too late. If that fails, I would do anything possible to get my money out of there. Apparently you and others like you do not think the same way, so "shady" business practices won't die. I just hope that your grandma doesn't ever get tricked into losing much because of that, or you will feel really really bad that day.

it's good of you to step up and have this discussion. It seems that justfab is using a Conversion Rate Optimisation trick that you're either not aware of or that you're deliberately downplaying. Put simply, the UI is set to have VIP membership activation default to ON. Those people who are not paying attention will not read the information in the right hand side bar, will check out and will mistakenly purchase the membership.

The simple way to fix this is to have NO DEFAULT. When a user clicks check out, you should show them a page with both options equally balanced. For example, you could have two radio buttons with neither option preselected. That way the user has to make an explicit decision to choose to become a member or not.

This is your opportunity to put your money where your mouth is. Get the justfab team to redesign it. Make it impossible for users to opt in by mistake. Rely entirely on users making an explicit choice. After all, if you genuinely believe that all of your valued customers opt in to the VIP membership by choice, then this redesign will not have any effect on your revenue.

Ball's in your court. We're all interested to know how you will play this.

(I am just going by the text on the image you have supplied)

The reason for the dissonance here is that justfab.com works just like a proper shopping site (in fact very like fab.com), except it's also a subscription site which signs you up for subscriptions. This is a dark pattern which uses user expectations (this is a shopping site), to sign them up for something that very few people want (book clubs for shoes). If lots of people did want this, the site could be far more honest about what it does, but it's telling that it presents itself as a checkout first and a club second (in a sidebar that many won't read), and requires action every month in order to skip a payment. How do you buy the product you're interested in, is that the tiny 'checkout as a regular member' link on the right?

It's entirely up to justfab.com how they present themselves of course, and I do dislike internet mobs piling on to criticise a company, but I thought it might be useful for you to hear the measured reaction of someone coming across the page for the first time:

I'm surprised, having heard of fab.com, that you trade under the name justfab.com - this seems a little shady to me, but perhaps it's just a coincidence - I see that justfabulous (now justfab) actually started first.

Looking at the home, I see no mention of subscriptions or subscribe, even in the small print. If the default experience is a subscription, that should be your big selling point, not something hidden away - this makes me distrust you once I find out what the company does.

I'd never expect to be auto-signed up for a VIP program - if it is a VIP program, how can it add everyone automatically? That is not what VIP means and is misleading - this makes me distrust you.

On the home page, the clearest message is that this gives you recommendations, there is no indication of subscriptions - this makes me distrust you.

On the shopping page, the layout is very confusing if this is a subscription and not a purchase - there should be a clear choice, with equal weight, between buy and subscribe. Text in sidebars won't be read by around half your customers, because usually it's meaningless fluff. Putting a warning in a sidebar suggests to me the company knows exactly what it is doing - this makes me distrust you.

The default should be to buy, not to subscribe, or at the very least there should be an explanation of why you should subscribe beside the buy button - when I find out the default is a subscription but is not presented as such, this makes me distrust the site so much I wouldn't ever shop there.

So this build up of distrust is an accumulation of small fibs or misleading statements which build up until I no longer trust what the site says. Now I'm not the target market for your site, but I find it hard to believe that the lack of mentions of subscriptions is a mistake, or that many other people wouldn't be tricked by it until they had signed up and realised their mistake in the second month.

Folks are right to be skeptical -- a lot of businesses have done this, tried to hide the fact there would be future charges. Does JustFab?

I'm afraid it still does in my opinion, yes.

Your summary above is a great statement of what you think works about the company, and how it all works, but it's at odds with the presentation of the site, which is far from clear or honest. If I hadn't read your statement from going to the home page and shopping pages I wouldn't have understood that subscriptions are the default.

If you don't want the site to have a shady reputation, it needs to be far clearer about what the proposition is to customers. Being completely honest and upfront with customers will lose you some profits in the short term, but make it more likely the site will prosper long term.

Perhaps consider a choice for customers - bu...

"It's in plain English" doesn't compensate for the fact that it's a small print sidebar and everything else looks and feels exactly like a regular shop.

Tricking people into getting a subscription via the small print is one of the oldest dubious business models around. Companies like JustFab disgust me.

I will make an effort to avoid you and Matrix Partners. I don't want to be near investors that justify such unethical tactics.

Yes, I'm sure you've done plenty of due diligence. You just lack ethics.

Math doesn't lie: if chargeback rates are higher than e-commerce norms, then this continuity program is misleading. If they are not, then the program isn't misleading. I cannot possibly see how chargeback rates wouldn't be astronomically higher than the e-commerce average, but maybe I'm just not their target customer.

I would love to see a response to this comment with their chargeback rates for the subscription charges but I doubt I will get it.

I looked at the picture you linked to, and even when I knew what I was looking for, I spent at least 5 seconds before I noticed the VIP membership. 5 seconds is more than I'll use on a step like this when purchasing something.

In my mind this is a scam and I will not recommend anyone to use this site. Don't get me wrong - I like the business idea in general, but there should be an option during checkout where you have to actively choose if you want to be a member or not. Anything which cost you money (especially recurring fees) should always require an active action from the customer!

Due dilligence my ass:

https://www.google.co.uk/search?q=justfab&oq=justfab&aqs=chr...

http://www.consumeraffairs.com/online/justfab.html

If purchase commits the buyer to additional monthly payments, albeit under some conditions, why isn't the user alerted to this in the shopping cart, where they are looking?

At what point does a UI disaster become a scam? As an uninvolved observer, somewhere around here I'd have thought.

You can self-justify all you want, but you just smelt green and wanted in on the dodgy action.

Can you say "Columbia house record club?"

You exploit people. Be ashamed.

Edit: I see from your profile you founded betfair. This all makes rather more sense, given the cloud that has perpetually hovered around that business, due to them, y'know, not paying out when people win "too much". Also repeatedly fined by the Advertising Standards Agency, IIRC.

You like your dodgy businesses. It's your call as to what you do, but a business that provides mutual benefit, rather than being parasitic, will survive in the long term. If you bleed your customers dry and rip them off, they will go elsewhere. You talk about retention, but you are not retaining - you are duping and imprisoning. I dare say you do not care, however, so long as the money keeps rolling in, and will simply move onto the next scam when this one gets too hot.

Most of my time spent clicking around was looking at shoes and bags, and then taking a personalized style quiz. It's not at all obvious that it's a subscription based site, unless you carefully read the sidebar during checkout, and the "how it works tab". Not only that, the "how it works" tab disappears after you log in, so you'd never see it again, once you take the personalized quiz and sign up for the service.

Most web users are pretty single-minded in what they want to do, and they don't read. And the site just navigates and feels like a shopping site. Not a subscription site.

I can see how the OP's girlfriend got mislead. As for jdh defending it--well, either you've just looked at the numbers and not tried the actual shopping experience through new eyes, or you're just being completely disingenuous.

http://imagesup.net/?di=15138026329215

You must realise that people are just going to follow their eye down the screen to the checkout button and assume that it's going to work like every other site. Putting something off to the side in the same font as everything else is what's misleading - it's likely that some significant number of people are going to click through without realising what they're signing up for. If there were a confirmation screen that just said 'Hey, this is a subscription!' Or something like that, then it would be less shady. As is it seems dishonest to claim that it was 'clear'.

Business models of this nature are slimy, seedy and morally grey at best.

If your product is so great then why the need to try and act this way and why feel the need to defend it on HN?

I checked the link. Nope, you are scum. This is theft. Shame on you.

If you really don't want them to look like scammers, make sure they include the monthly price right there.

I consider myself a fairly savvy internet user, and, even knowing it was there, it took me a good 20 seconds or so to find the part about a monthly charge in the image you posted.

The user attention is focused on the "continue checkout" box. It looks very similar to a part of the checkout flow at most other online retailers. Nothing in that box indicates a monthly charge. Nothing in that box even indicates that there's a choice between VIP and non-VIP. This information is relegated to the sidebar. In most websites, the sidebar contains non-critical supplementary information. Titling the sidebar with "VIP membership program" suggests to the user that the sidebar contains information on an opt-in (rather than opt-out) program that they can safely ignore if they just want to buy a pair of shoes.

It looks to me exactly like a dark pattern designed to trick the user into signing up for the monthly service without realizing what they are doing.

You can do mental gymnastics all day long if you want to, but it'll be hard to find anyone that doesn't think that what you are doing is malicious fraud.

Edit: I see you are the founder of eHow (content farm) and Betfair (gambling). It doesn't surprise me at all. Maybe next time you could invest in human trafficking and brothels.

In fact, I've opened the homepage of justfab and it does not mention subscription anywhere on the homepage, just the 39.95 price which any reasonable person would conclude is one-time deal and not a recurring subscription. It is mentioned only once on the very end of "how it works" page, as if it were an insignificant detail. Such detail like recurrent charge I think should be prominently mentioned. If you buy a loaf of bread in the store, you don't expect to be automatically enrolled into "bread appreciation club" that would charge you each month, do you?

The companies that behave in such a manner and try to trick customers into something that is not at all clear for them what they are agreeing to not only hurt the consumers, they hurt the whole internet sales ecosystem. Now what I would say to a relative or friend who is not adept in recognizing all tricks and fine prints? I would say "never buy anything at all from a store you don't know and that somebody who knows all the tricks have vetted". Which hurts the whole system, now every newcomer has to work harder to prove he's not one of those scam ones and it not going to trick you into something you don't want to do.

This is fraud, pure and simple - if this is somehow legal and within USA consumer rights laws, then it's not a sign that the company is right, it's a sign that the consumer rights laws there are broken and need to be changed.

I am about to get philosophical.

If we look immediately at what it means to invest, what we come up with is a profit equation. One tries to maximize the expected profit of an investment, taking into account risk.

But let's try a thought experiment. What if you had 1,000 times more money than you do right now? So if you're a millionare, you're now a billionare. Would that change what you invest in? In what ways would it do so?

Would you start making even larger investments, with even larger returns? If so, what if you had 1,000,000 times more money than you do right now? At what point does profit for profit's sake become pointless?

I think that deep within yourself, you know that investing is not merely about profit for profit's sake. Somewhere in there I think you recognize that by choosing what to invest in, you have an awesome power to change the world. You have power that extremely few people have. You are, in essence, the real life equivalent of a super hero.

Based on that, let me ask you this question:

Is this really how you want to change the world?

Is this truly how you want to spend the vast power you have at your disposal?

Wow. Absolutely appalling. You really should be ashamed of yourself as should anyone working for Justfab.

> founder of Betfair (UK based, IPO) and eHow

"betfair" is an oxymoron, a fair betting company is a betting company that does not stay in business long

"eHow" is the pioneer of the "content farm" business

"justfab" fits quite nice into this portfolio

This page is absolutely designed to catch people unawares. You long term subscribers becuase people a) don't realise theya re being repeat charged, b) they don't know how to cancel.

The business model is based on tricking people. As a VC you are not stupid, you know how this business works. To pretend otherwise is just a lie.

When I was a kid there was this mail-order thing called Columbia House Record Club. It was the same business model. They entice you with super cheap music.. if you signed up for a monthly subscription. I was a happy customer. Because I was smart enough to work the system, cancel in time and get a bunch of free CDs for pennies.

But guess what? Somebody was filling their coffers and it wasn't me. Columbia House made $500M/year. It was the regular folks who didn't pay close attention and didn't realize just how much they'd be charged on a recurring basis for stuff they didn't want.

So this VC's use of high customer satisfaction rates as a defense is utterly without merit. That's the nature of this business: savvy customers do well, but at the expense of another set of exploited customers.

Here's a great article on Columbia House, which calls it "one of the more dishonest and predatory marketing devices of the 20th century". It could just as well be about JustFab.

http://thephoenix.com/boston/music/129722-rise-and-fall-of-t...

Oh.. and now I have a really bad impression of Matrix Partners.

Why isn't there an entry after the "TOTAL" informing you of the subscription charges.

They do count as charges and should be shown in a statement listing all charges.

This is definitely sleazy. The monthly payment is not mentioned anywhere near the pricing info. The page is designed to look like you make a one time payment, and only at the very bottom of the sidebar (and you know very well that sidebars never get read) does it mention that they're charging you every month.

It is obvious that many people will miss this. The creators of this site intentionally mislead their customers.

"Continue Checkout" surely is not the same as "Continue Signup" and definitely not the same as "Become a member of our VIP club for 39$/m".

A sustainable business model wouldn't need to trick people into this. It would broadly (not in small print as it's done right now) advertise the benefits of the VIP program and convince people to sign up.

I'm sorry, but the second half of your sentence does not follow from the first.

Your due diligence as an investor in no way reassures users that they are not being scammed. For instance the very "dark patterns" that Justfab seems to be relying on (https://news.ycombinator.com/item?id=6455927) might look great to you as an investor focused on increasing revenue and profits, but are designed to trick users.

That said, kudos for jumping in to defend your investee!

Unfortunately, you're likely to greatly benefit from scamming so many people.

Then I saw your screenshot.

Your defence of this company has succeeded where the OP failed, in proving beyond a shadow of a doubt that this is an unmitigated scam. You should be ashamed for attempting to profit from such a thoroughly disreputable con.

> Folks are right to be skeptical -- a lot of businesses have done this, tried to hide the fact there would be future charges. Does JustFab?

Yes. Yes. YES! They've quite clearly worked very hard to hide it.

Have you received some sort of ethics bypass that renders you literally the only person in this thread unable to see that?

That said, where I checking out, my eye gravitates toward that big red 'Continue Checkout' button, not the fact that I'm signing up for $479.40 a year. A more blunt but upfront UX would hit them with interstitials.

The only reason why I would think that you don't want to extend that olive branch is because you are afraid that it will set a precedence for other JustFab users, and that JustFab will be engulfed with refund requests. This however flies in the face of your firm believe that the majority of JustFab users are extremely happy with the services provided.

So, in a nutshell, instead of disputing whether or not the VIP subscription requirement is "scammy" or not, I would think that you would advocate the shortest route to conclusion in this case: refund the money.

In my eyes, anything less is simply vindication of the concerns outlined in this discussion thread.

If it weren't trickery you'd have two same size button next to each other, one saying "VIP checkout" and the other "regular checkout " but this would significantly reduce the number of subscriptions.

http://www.boston.com/business/technology/innoeco/2009/11/th...

(Far more details on TheFunded for those who are members.)

In the context of the original poster's story, this reply only reinforces the idea that JustFab is scamming many many thousands of people and not just the odd person here and there.

Offer complete refunds of all paid subscription fees to anybody who asks for one. No questions asked. Single button, right from your "My Account" page. Refund all 8 months of those charges in one shot.

If you're correct, and it's just a tiny fraction of a percent of your userbase who neglected to read that six paragraph sidebar disguised as an ignorable upsell ad, then chances are nobody will ever ask for this refund and you guys will all be good to go. You can even offer it only to people who have never bought a second item, thus limiting it only to those few silly folks who put themselves in this boat through their own foolishness.

No harm right, since as you say, your guys are on the up and up.

It's well designed for your purposes. Appallingly designed if you actually want someone to notice that they are signing up for an ongoing bill.

Still, I learned something useful about Matrix Partners today.

Why can't you just have a intermediate page saying "Save 50% by subscribing to VIP membership at $39 / month" with all the explanation & have "Yes, subscribe me as a VIP member" & "No Thanks" instead of adding that by default ? JustFab won't do that because they know conversion will be much lower.

In every site I have purchased, I have never seen this experience. So how do you want me as a user to SUSPECT a monthly recurring charge like this ?

This is automatic and opt-in, and non-obvious opt-out recurring membership fee. It's scummy and the default should be to purchase as a normal member, then try to genuinely upsell me in the sidebar. It's the equivalent of being automatically enrolled in amazon prime when I go to buy anything from amazon, and having to click a tiny link to the right that says "don't enroll me in amazon prime, just let me buy this" if I don't want amazon prime.

The entire shopping cart is an example of a dark pattern. http://darkpatterns.org/ and I personally wouldn't use a site whose entire business model clearly hinges on tricking or ensnaring its customers.

http://i.imgur.com/dmxIwHr.png

So, it's obvious that the intent is to hide the fact that membership is $39.95 a month. The goal is to trick the person into getting the membership. I guarantee that's intentional.

Porn sites don't even go this far.

Edit: I should also note that you are fabricating a story here.

"By asking members to commit to come back to the site once a month..."

You aren't asking. You are including the person automatically, and requiring them to opt-out. And you are keeping that as hidden as possible by including this important information "in the same font size as everything else on the page."

And I bet you wonder why VCs get a bad name!

EDIT: haha founder of betfair and eHow. Delicious.

I buy running shoes from an online retailer that also provides a VIP membership. And it can be clearly understood in 5-10 seconds. And you have to opt-IN to the membership and opt_IN to auto-renewal of the charge. And guess what?? It's 1.99 per YEAR - clearly not a great source of income to the company. And my discount is considerably more than 1.99. (I guess they just don't want me to check out as a guest.)

Your company's business model is based almost entirely by hiding charges.

The fact that you successfully tricked a million people does not make it Okay.

However, one must admire how committed you are as an investor to go down hard with this sinking ship.

I don't think anyone is pleased to know that you believe this is to a scam company.

> I just went to the site -- you can do this -- picked a random pair of boots and put them in my shopping cart. I then clicked checkout, and here is what that page looked like:

> http://imagesup.net/?di=15138026329215

Yup, that's misleading.

> Seems pretty clear to me. You can get the boots for $39 if you join the VIP program. "With this purchase, you will be activating your VIP membership"

Yep it's pretty clear to me, there's a pair of boots in the shopping cart and you can continue to checkout.

> It's in plain English, and in the same font size as everything else on the page.

Fontsize schmontize. The checkout button is bigger.

The "checkout with no monthly fee" not-really-a-button is both smaller and misleadingly labeled.

It's also in muted colours, and it is very purposefully placed AFTER the big bright pink checkout button.

In the sidebar, where you normally place information that leads away from the current task (reviews, 'recommended items', advertisements, etc).

YOU are being very dishonest if you claim the above is not purposefully misleading.

Is there ANY reason why these terms are not in between the shopping cart and the checkout button? Any reason except tricking people into missing this rather important bit of info?

Because all other websites that actually want you to read those terms do so. They even make you check a checkbox to pull your attention to it.

You know why other websites do that (oh yes you do), it's because they don't want to trick their customers.

The fact that you're defending this and feigning ignorance makes you quite scummy as well.

In other words, nearly half of the people who get tricked into subscribing cancel?

Let's also not forget that this will typically be on a credit card - many consumers do not examine their statements closely and will just continue forking over minimum payment. (Of course we won't forget it - it's part of the business model, after all.)

How much does the service cost that takes action automatically for you between the 1st and the 5th? Isn't this what computers are for to do things automatically for you?

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

> "I wonder how much of this $100 million are from people like my girlfriend who simply didn't read their entire 2,500 words Terms of Service and were unaware that they were charged $39.95 a month for nothing" -- Seriously, please look at the link above to the checkout flow and tell me that's how you see it, that you have to read the 2,500 word TOS to figure out that this is the case.

That screenshot looks pretty bad to me. I'd expect recurring charges to appear in the same bright pink colour, and in the same "sub total, total continue checkout" box, as the other charges.

People are conditioned to get enrolled in things like loyalty/rewards clubs that give points for purchases. No big deal. That's what this looks like if you happen to notice the block in the upper right corner. Most people ignore what's in that area anyways. You're full of shit.

You should lose your job for being unable to find a better investment for your clients' funds than a scam website.

Why hide it like you are doing so now? In the sidebar, where ads are usually placed (and ignored), and in non-emphasized font.

Due diligence cuts both ways. If you're looking to raise money for a startup, research the VCs you are talking to. Consider their other investments and the way they conduct business.

http://www.youtube.com/watch?v=W5i_m9k7Wos

'With this purchase you are activating your VIP membership' is smaller and in black. Incredibly easily overlooked.

It is possible that the JustFab UI designers aren't very good and have made a terrible mistake but the overall look and feel of the rest of the site would suggest that they have put a LOT of thought into steering their prospective customers down a very clear route to purchase and know EXACTLY what they are trying to do here.

Where reasonable you should be able to cancel by the same method as you signed up.

E.G. if you can sign up on a website, you should be able to cancel on the same website.

This report can be accessed though https://www.annualcreditreport.com which is jointly operated by the big 3.

This is the only site for a free credit report. Everything else is a scam.

EDIT: I see you actually meant credit score, that's a bit different.

No, its quite obvious that you need to opt out if you don't want to pay -- they explicitly say the membership will be billed to the credit card attached to your account at the end of the free period, and force you to attach a credit card to your account if you don't have one already attached in order to sign up for the free Prime trial -- when you sign up, though its also easy to forget afterwards. But they give you a complete refund anytime in the paid period if you ask, as long as you haven't used any Prime-exclusive benefits during the paid period.

And its a zero-friction, click-a-button, cancel-and-get-refund thing.