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Rant Time: MagicJack – Scam or Legit?

Posted in botch, business, scam, scams by commorancy on September 11, 2018

magicJackThe magicJack company offers a voice over IP phone service. You can use it with an app on your phone or by a device plugged into an actual landline-type phone. It does require Internet to function. Either way you go, it’s VoIP and they have very questionable and deceptive billing practices. Let’s explore.

Internet Phone Service Choices

If you’re in need of phone services on a device that only has access to WiFi, then a voice over IP service (VoIP) is what you need. There are many different VoIP services available on the Internet. You can even make audio and video calls via Facetime on iOS, via Skype on pretty much any mobile or desktop computer or even via Google Hangouts. For this reason, magicJack is yet another VoIP phone service in a sea of choices.

Why would you want to choose magicJack? Initially, they were one of the lowest priced VoIP phone services. They also offered a tiny computer dongle that made it easy to plug in a standard home phone. That was then. Today, mobile devices make this a different story. Lately, this company has raised their prices dramatically and they’re performing some quite deceptive and questionable billing practices.

911 Service

As with any phone service that offers the ability to use 911, the service must tack on charges to the bill by the municipality. You’d think that part of the invoice that magicJack is already collecting in payment of services would also cover for those 911 services. I certainly did. Instead, magicJack isn’t willing to part with any of their service revenue to actually cover services that, you know, they provide as part of your phone service… like any other phone company does.

MagicJack seems to think they can simply pass on said charges right to you in an email invoice and have you pay them separately. Here’s where magicJack gets firmly into scam and deceptive billing territory.

I’m sorry magicJack, but you’re forcing the 911 service when we don’t really need it or want it on that magicJack VoIP phone line. If you’re going to force this service as part of the overall service, then damned well you need to suck it up and pay the expenses from what we pay you. There is no way in hell I’m going to pay an ‘extra’ bill simply because you are unwilling to use the collected service fees to pay for those bills, like any other carrier on the planet. It’s not my problem that you choose not to do this.

You, magicJack, need to pay those bills to the 911 service. It’s your service, you forced 911 onto my line and now you must pay the piper. If you can’t do this, then you need to go out of business. This means, you need to collect the 911 service fees at the time you collect the payment for your services. And you know what, you already collected well enough money from me to cover those 911 service fees many times over. So, hop to it and pay that bill. This is not my bill to pay, it’s yours.

MagicJack Services

Should I consider magicJack services as an option when choosing a VoIP phone service? Not only no, but hell no. This service doesn’t deserve any business from anyone! This is especially true considering how many alternatives exist for making phone calls in apps today. Skip the stupidly deceptive billing hassles and choose a service that will bill you properly for ALL services rendered at the time of payment.

MagicJack is entirely misinformed if they think they can randomly send extra bills for whatever things that they deem are appropriate. Worse, magicJack is collecting payments for that 911 service, but you have no idea if that money will actually make it to the 911 municipal services in your area. That money might not even make it there and you may still receive a bill. In fact, if the municipality does send you a bill, you need to contact them and tell them to resend their bill to magicJack and collect their fees owed from magicJack, which has already been collected in the funds to cover any and all phone services. If magicJack claims otherwise, they are lying. If you are currently using magicJack’s services, you should cancel now (even if you have credit remaining).

Is magicJack a scam? Yes, considering these types of unethical and dubious billing practices. Even though their VoIP service works, it’s not without many perils dealing with this company. As with any service you buy into, Caveat Emptor.

MagicJack Headquarters

Here is the absolute biggest red flag of this scam company. MagicJack claims their corporate headquarters address is located here:

PO BOX 6785
West Palm Beach, FL 33405

Uh, no. Your headquarters cannot be inside of a PO Box.

Yelp claims that magicJack’s US address is here:

5700 Georgia Ave
West Palm Beach, FL 33405

Better, but still not accurate. This is not their corporate headquarters. This is simply a US office address. Who knows how many people actually work there? We all should know by 2018 just how many scams originate from Florida.

When you visit magicJack’s web site, no where on any of the pages does it show their actual physical headquarters address. This is a HUGE red flag. Where is magicJack’s actual headquarters?

magicJack Vocaltev Ltd (opens Google Maps)
Ha-Omanut Street 12
Netanya, Israel

As a point of consumer caution, you should always be extra careful when purchasing utility and fundamental services from any Israeli (or other middle east) companies. Worse, when companies cannot even be honest about where their corporate headquarters are on their own web site, that says SCAM in big red letters.

Class Action Lawsuit

Here’s another situation where this company needs to be in a class action lawsuit. I’m quite certain there are a number of folks who have been tricked into this scammy outfit and are now paying the price for their unethical and scammy business practices. However, because they are located in Israel, setting up a class action lawsuit against this company may be practically impossible. Better, just avoid the company and buy your phone services from U.S. based (or other local) companies where they are required to follow all local laws.

Rating: 1 star out of 10
Phone Service: 5 out of 10 (too many restrictions, limits call length)
Customer Service: 1 star out of 10
Billing: 0 stars out of 10
Overall: Scam outfit, cannot recommend.

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How not to run a business (Part 10.2) — Case Study: Trust

Posted in botch, business by commorancy on August 1, 2015

A business is as good as the trust it practices. Trust is a crucial element in gaining new business. If prospects cannot trust you or what you offer, trust that your business is genuinely there to help your customer, trust that you will provide a high quality service, your business will not succeed. Trust is mission critical to business success. Let’s explore.

Kickstarter

Recently, you may have heard about the H+ Holus project on Kickstarter. Its premise is to create a display device that can provide a wide variety of viewing angles. Some words used to describe the device include ‘holographic’, ‘holographic experience’ and ‘3D’.  From the link above, the description states,

Holus provides a blend between the digital and real world by converting any digital content into a 3D holographic experience

To visually get the point across, H+ uploaded some CG representations of what the finished product might look like… including this video….


By Day 3 of this Kickstarter project, the project had already been funded the amount of $200k CAD. So here’s where things get a little dicey with both this project and Kickstarter when complaints begin to roll in. At the end, the Holus project raised $297,790 CAD. Some sites are already asking if the Holus is the most expensive scam in Kickstarter history. Reddit readers state these grievances of the Holus device.

Kickstarter’s rules are clear on misrepresentation. In the above video, it is clearly shown that as the camera moves, so does the 3D of the imagery. With Pepper’s Ghost and a flat screen, this is not possible which misrepresents the capabilities of this device. In other words, Kickstarter doesn’t allow realistic 3D rendered concept photos or videos as part of the project. Including photos of the prototype or drawings of the concept is perfectly fine. However, 3D realistic images depicting a concept are not acceptable and Kickstarter’s rules prohibit the use of such imagery.

3D Displays

We all know what these are. They’re basically your flat screen TV with shutter glasses. They’re cumbersome to use, give you headaches and, in general, are mostly a novelty. Yet, this is the state of 3D displays in 2015. No, we do not yet have floating displays such as what’s shown in Minority Report or Avatar. These displays, if even possible, are years away from becoming reality. Yet, here we are on Kickstarter with a small company claiming they’re about to produce a 3D Holographic display. Frankly, it’s not possible. What Holus offers is no better than Pepper’s Ghost.

Pepper’s Ghost is a technology that dates back to 1862 and is named after John Henry Pepper who discovered the illusion. A Pepper’s Ghost display has no relationship to holograms or holography, further misrepresenting the display. What Holus offers is a flat screen reflected off of a transparent surface. Because the screen located in the roof of the cabinet is flat, it’s definitely not 3D (without using glasses). Worse, there are already devices like this available on Amazon right now for the iPhone for $10.99. Visit Amazon and compare.

Holus Deception

Whether the H+ folks intended to deceive or were naïve about what they could show on Kickstarter, it doesn’t really matter from a fraud management perspective. The listing violated Kickstarter’s rules. Yet, Kickstarter did nothing to stop or prevent this listing from continuing. In fact, it seems that Kickstarter even awarded the Holus Kickstarter Project as a staff pick at some point. When this listing was brought to Kickstarter’s attention for misrepresentation, they ignored the warnings and allowed the project to fund anyway.

Trust

As a CEO, it is important to maintain trust with all of your customers. If you don’t attempt to maintain that trust, your business is hopelessly lost.  Case in point… Kickstarter CEO Yancey Strickler leaves a comment on Joanie Lemercier’s ‘covering up a scam’ blog article after she and several others unsuccessfully attempt to bring this misrepresented project to the attention of Kickstarter. Strickler’s comment is defensive and deflecting. Here’s what Strickler has to say (full comment below):

Hi Joanie —

Yancey from Kickstarter here.

I’m responding, in part, to thank you for the attention you’ve paid to the Holus project. We’ve seen a lot of debate and strong feelings around the project, and we’ve heard a lot of questions about our policies and how we enforce them. I’d love to clear up a few things about how we did so in this case.

Part of the issue we’ve seen with this project revolves around words like “hologram,” “holographic,” and “holographic experience,” which people have come to use in so many different colloquial ways. Some of our most-discussed “holograms” — Tupac Shakur’s appearance at Coachella, CNN’s election-night guests — aren’t holograms at all. Even Microsoft bills its HoloLens as a holographic product. There’s an odd lack of clarity involved in what many people mean and understand when they say the words.

So in this case, our approach was to focus in on how Holus actually worked. We asked the Holus team to post an update that demonstrated, clearly and openly, exactly what they were working on. They responded with a public update that outlined the technique they use. That update was emailed to backers of the project, to help make sure everyone involved was fully clear on what they were supporting and what they could expect.

Then there’s the question of our rules for hardware projects. First, we require creators to show prototypes of their work. Second, we prohibit them from using photorealistic renderings.

Holus satisfied the first rule, posting a number of demo videos and documentation showing working prototypes. But when the project originally launched, it included CGI renderings. We informed them that this was strictly prohibited; they promptly removed the material. They also emailed backers to clarify their process, including a video demonstrating their iterative prototypes.

And last, there’s the question of the staff pick. Holus was originally selected as one, until we spotted and received reports about CGI renderings. We immediately removed the staff pick status, and asked the Holus team to remove the badge they’d added to their project image. (Staff pick badges aren’t a part of our system; we don’t create them or provide them. Actually, we strongly advise creators not to use them at all.) They promptly did so.

In other words, the project conformed to our stated rules, added more information on request, and made a transparent, good-faith effort to thoroughly inform backers about the nature of their work. Based on that, we continued to monitor it, but allowed it to remain on the site. The question then became: were people interested in backing it?

And this is the part where you — and the broader Kickstarter community watching these projects — become invaluable. One of the reasons Kickstarter uses all-or-nothing funding is because it gives everyone involved in a project time to really research what the creators are doing, discuss it with others, and come to a collective decision about whether it’s still worth supporting. Ultimately, it’s backers who decide what gets funding, not us.

That’s why we’re always grateful to anyone who joins in the public debate about projects, asks tough questions about the claims they’re hearing, and shares their expertise with other backers. That kind of discussion is crucial, especially when it comes to new technology. It helps our Integrity team monitor projects for problems or violations of our rules — as we did throughout the Holus campaign. It helps backers vet ideas and make the most informed decisions possible. It holds creators to a high standard, and helps them build stronger communities. It does all these things no matter what action Kickstarter winds up needing to take, and whether projects succeed or fail.

And that’s why I’d like to thank you — and to say that, if you’ve chosen not to get involved in any more projects, we’re sad to hear it. The role you played in this one is incredibly important. Members like you are welcome in this community any time: you make things better for everyone involved.

Cheers
Yancey

This is not the type of diatribe I expect to hear from a CEO. CEO’s are the top agent of the company. They are the person who investigates wrongdoing and the person who puts a stop to it. No where above did Yancey even mention investigation, taking the strictest action or in doing anything to prevent such an occurrence in the future. Sure, they requested the prohibited content removal, but only after the project was already mostly funded. Kickstarter also didn’t apparently require full disclosure of this content removal to the backers.

Instead, he defends the project and states that it is the backer’s responsibility to post meaningful discussions, debate the project and then choose or not choose to back based on these comments. That’s all well and good until Joanie points out in a later blog post that in among other behaviors by Kickstarter to ignore the project and let it proceed, Kickstarter also

DELETED the embarrassing questions asked in the project comments (see screenshots).

When Kickstarter deletes comments that could help backers make informed decisions, that ultimately means that Kickstarter no longer respects the backers and is in it to make sure the project succeeds whether it’s a real project or not. This also means that Kickstarter is in it for the money they will get from the project rather than protecting backers from fraud. This is a serious breach of trust and one that should resonate to every backer who has ever backed a project at Kickstarter.

In fact, Joanie points out all of the trust related issues around this Kickstarter project:

YOU DID NOT REPLY to the official ‘reports’ made from day 1 (except email auto-replies).
YOU DID NOT LISTEN to the experts: Jason Sapan has been making real holograms in NYC for over 40 years, he warned you about the fraud.
YOU DIDN’T CARE TO COMMENT  the 3 in-depth articles (123) written by Raphaël de Courville about his investigations on the scam.
YOU DELETED the embarrassing questions asked in the project comments (see screenshots).
YOU DID NOT MODERATE messages from suspicious accounts (1 – 2) and Holus partner comments (1) who broke another rule.
BACKERS WERE NEVER INFORMED about the replacement of prohibited CGI and removal of staff pick status.

There were probably even more behaviors not documented here, but these are enough to show that even though Kickstarter was made aware of the project early in its life, Kickstarter ignored it all and even colluded in making sure the project appeared to be legitimate.

Even Yancey’s comment to Joanie attempts to justify the above actions in an obtuse fashion.

Business Don’t — Don’t allow fraud on your service

This is probably one of the biggest business don’ts I’ve ever documented in this series. You don’t do what Kickstarter did. If you establish rules by which the community must follow, then you need to ensure they are enforced regardless of outcome. Even if you stand to lose 20% of that 200k or whatever Kickstarter’s commission is, that is chump change compared to the trust you’ve lost from your community and the possible legal ramifications you face (which I guarantee will cost you more money than any commission you’d make from the fraud). Your community keeps you in business. For this reason, this trust case is worth studying. It’s worth realizing what not to do when running your business.

In Kickstarter’s case, the appropriate action would have been to delist and refund all backers before the project closed. Then, request the project owner to relist the project using drawings or other imagery that doesn’t violate Kickstarter’s terms… instead of silently requesting the images be removed without letting the existing backers know… instead of removing key discussions from the project to inform backers of what this project really is… instead of ignoring emails ultimately saying that the project is fraudulent.

Fraud is a very real possibility anywhere and everywhere, especially with crowdfunded projects. Fraud is intentional misrepresentation of something. It’s against the law in the US and the US government investigates and takes legal action against those who commit fraud against buyers. Allowing fraud to exist on your own web service and then doing nothing about it once you become aware is collusion and makes your business as much liable as the person who set up the fraudulent listing in the first place. The one thing you cannot know is intent and intent is the difference between innocent misrepresentation and outright fraud. However, to the government, intent doesn’t matter, only the outcome. As a business, you must error on the side of caution and assume the intent is intentional misrepresentation, which means taking the strictest action possible and forcibly removing the offensive content from your site. If your business cannot protect its own customer, then no one will and you’ve lost your customer’s trust. They trust you to be their advocate against thieves, scams and fraud when they are using your service. When you fail at protecting your customer from fraud, your company has failed.

Were someone to bring legal action against Kickstarter and H+ for the alleged fraud of this project, there is definitely enough evidence that Kickstarter could be held liable and culpable in this activity.

Enforcing Business Rules

Once you establish business rules by which your clients must abide, you need to absolutely enforce those rules by the strictest of actions in every case. If you allow even one client to slide by the rules, your business could end up in court. If you are on the other end of a Kickstarter project and you choose not to deliver on your backer rewards, the US Government will come after you. Fraud is a federal crime and can lead your business into a lot of federal legal problems. Ed Nash found this out the hard way when his company, Altius Management, failed to deliver the $25k Kickstarted funded Asylum card game in 2012.

Failure to provide the necessary level of trust through enforcement of your rules could lead your business into bankruptcy. In this case, Kickstarter’s woes are just starting. How this all ends for Kickstarter is yet to be known, but it’s probably not going to end well. How this ends for H+ and the Holus device is yet to be seen, but delivering a Pepper’s Ghost to backers will likely lead to outrage.

Part 10 | Chapter Index | Part 11

America’s Recession: loans and scams

Posted in economy, fraud, scams by commorancy on December 16, 2008

Economic Downturn & The Fed

Unless you’ve been hiding in a cave, you’re probably aware that we’re going through a fairly deep recession. Recessions are cyclical, but in this case it probably could have been either avoided or lessened IF the banks and lenders had not been offering creative financing techniques. It also could likely have been avoided if our current pro-business govt. administration hadn’t chosen to look the other way while bad mortgages were being doled out. The problem with all of the creative financing is that it tended to lead some people into believing they could afford a mortgage they could not afford. When the loan reset after the promotional period, the realization quickly set in. Worse, the situation was compounded by property investors who sank huge amounts of loaned money into properties that would eventually become valued less than the loan.

It’s not as if the handwriting wasn’t on the wall several years ago when the fed dropped the rate to 1 percent. Now, we are back in this exact situation again with the fed dropping the rate to an unprecedented 1/2 percent. The feds are, again, trying to spur the economy like they did 2-3 years ago. But, this time, the banks don’t have money to lend. So, the 1/2 percent may not trickle down into the mortgage market like it did several years ago.

But, our economy is still likely being set up for yet another financial failure. The banks that do have money to lend are still advertising on the radio claiming extremely low interest rates.  The problem isn’t the rate, but the loan you’ll be getting. If it’s a standard fixed rate loan, that’s fine. But, it’s the fine print you need to read. Don’t get locked into an adjustable rate mortgage or a limited time interest only loan. Once these creative loans reset in a couple of years, you may end up deep under water.

The Fed, therefore, needs to be extra careful when cutting the rates this low again to avoid the same mortgage problems all over again.

Scams in a down economy

With the economy being so depressed, it’s also a good idea to watch your money closely. As money gets tighter and tighter, the scammers will come out of the woodwork (and they already are). I’ve already noticed a drastic increase in spam and phishing emails since the economy has taken a turn. It’s going to get worse before it gets better.

There are many scams out there from the Nigerian 419 scam that claims to give you a ton of money only to rip you off of thousands of dollars before you realize it, to sending you what look like official invoices that only turn out to be scams in themselves. Don’t fall for them. The easiest way to avoid scams is to not give out any personal information to anyone who approaches you claiming to be from a legit company. This means, if you receive a call asking you to make a payment and they request for you to give a credit card over the phone, don’t. Make sure you know who this company is first and make sure you are a customer. Then, tell the company that you will call them back through their official channels and make a payment that way. As long as you are the person making the call to the official number, you should be safe. With incoming calls, you have no idea who is really calling you no matter what the CallerID says. Always, always call companies back from official numbers located on a trusted bill or from the back of your credit card.

TV advertisements that offer products or services usually employ people who are not paid very well. So, be wary when you give your credit card number out to TV commercial based purchases. Not only are some of these companies impossible to get refunds, your card number could be enrolled in a club or, worse, stolen by one of the telephone operators in an independent scam. You should always Google the product you are thinking of purchasing to 1) find out if you can find it cheaper online and 2) find out if people have had issues with either the product or the companies refund polices.

Get rich schemes are basically another form of scam. Yes, they do make someone rich… the person who created the scheme, but not you. Get rich schemes are usually designed to part you from your money. So, in a down economy, you should avoid get rich schemes (placing classified ads, setting up ecommerce sites that sell Amway products, or Multi Level Marketing – MLM schemes). Note that MLMs only make the top most people money. If you’re anywhere near the bottom, you will be parted from your money.

Craigslist and even eBay are a haven for scammers. Be careful when you work with people selling or renting things. Never buy or rent anything sight unseen and never give money out as a ‘deposit’ or to ‘hold’ something unless you truly trust the individual. Chances are, if the person you are thinking of doing business is presently outside of the US, you should immediately stop the transaction unless you know for sure that what they are selling/renting is legit.

If you are selling a car or renting out an apartment, watch out for scams here too. There are some people who are outside of the US who will claim to give you an excessive sum of money in the form of a check. They may even send you what looks like an official check.. the problem is that it will bounce causing you fees and other associated problems (and may let them get access to your account number). Don’t cash any checks like this.

The bottom line is that in this weak economy, you should be extra careful with your money as there are lots of desperate unemployed people willing to do anything to make a buck (or a thousand). Always make sure to do your homework before buying anything or giving out personal information to someone you don’t know. If you suspect a scam, you should alert your bank or credit card company immediately.

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