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Local firm slapped with $125,000 fine for "free"

 
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francois
magicJack Apprentice


Joined: 29 Jul 2008
Posts: 18

PostPosted: Wed Apr 15, 2009 1:00 pm    Post subject: Local firm slapped with $125,000 fine for "free"

http://www.palmbeachpost.com/localnews/content/business/epaper/2009/04/15/0415magicjack.html
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mberlant
Dan Should Pay Me


Joined: 01 Feb 2009
Posts: 829
Location: Japan

PostPosted: Wed Apr 15, 2009 7:53 pm    Post subject:

Unfortunately, the title of this thread is incorrect on two counts.

First, MJ was not assessed any fine. They settled, without admitting guilt (because they were not guilty, in my opinion), and agreed to reimburse the county for its expenses. This amounts to extortion on the part of the county because they demanded to be reimbursed for the costs of a baseless investigation, but for MJ paying the ransom was less expensive than defending the case in court and ultimately being found not guilty. MJ would have had to spend more than that $125,000 in the court proceeding, with no guarantee that the judge would understand credit card operations any more than the prosecutor, so they opted to stop the procedure at this point.

Second, "free" was not a point of contention in this action. The county failed to understand the difference between an authorization hold on a credit card and a sales transaction. There have been discussions in this forum on that very topic, where the "victim" failed to understand that the money was still his, but he could not have use of it during the 30 day window.

I don't believe there ever was a pattern of processing a charge transaction at the outset of the sale instead of an authorization transaction.
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QuantumIguana
MagicJack Newbie


Joined: 06 Apr 2009
Posts: 8

PostPosted: Thu Apr 16, 2009 1:03 pm    Post subject:

It's similar to making a hotel reservation with a credit card vs. a debit card. If you use a debit card, the amount may be decucted from your account and then only added back if you cancel within the hotel's time frame for cancelling.
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kcowan
MagicJack Contributor


Joined: 26 May 2008
Posts: 51

PostPosted: Wed Jun 17, 2009 9:32 am    Post subject:

There is a little difference. The hotel does not offer the first night free.

In the advertising world, MJ would be smarter to be offering a moneyback guarantee.

BTW, it sometimes take 3 days to get a pre-authroization removed from a credit card. You will discover this if you book into a hotel for a week but leave after the first night.
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MJKobe
magicJack Apprentice


Joined: 20 May 2009
Posts: 10

PostPosted: Thu Oct 15, 2009 1:53 am    Post subject:

I dunno, I can see other "free" services where you get a trial but not charge your credit card during the trial. In case of MJ, if they charge then its not free I guess.
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