Disinformation ?

[tada]

I realize the "titles" given to users on this forum make fun of the magicJack "Inventor" Dan Borislow, but on the bright side, from what I've read, this board intentionally does not make it easy for normal end users to abuse the magicJack service. It's an interesting contrast, but I'm still curious about one thing:

Is it just me, or is there just a ton of disinformation and defamation of magicJack out there on the web?

I'm sure all the $20 a month VOIP services out there must be real upset by magicJack entering the market with a $20 per year service, but the amount of trash talking I can easily find is just unreal.

If it's just my imagination, please tell me to shutup and add another layer of tinfoil to my hat, but if you have any insight or opinions on the possible disinformation/defamation topic, I'd like to hear them.

Sorry for asking a potentially contentions question, but my "just-not-right" meter keeps crossing over the red line when searching the web for info on magicjack.

thanks!

[az2008]

Is it just me, or is there just a ton of disinformation and defamation of magicJack out there on the web?

I'm sure all the $20 a month VOIP services out there must be real upset by magicJack entering the market with a $20 per year service, but the amount of trash talking I can easily find is just unreal.

Your comments belonged in the reviews or rants/raves area.

I agree that the incumbents have a vested interest to spread FUD, etc.

However, Dan makes it very easy for them to do so (which means the incumbents aren't lying).

- The 30-day trial (which ends today, every day).
- A random number generator showing the number of purchases (it used to be random, not sure now.).
- The "come on" appeals for expedited handling of your order (when your order ships just as fast if you don't buy it.).
- Charging before the item ships.
- Terminating customers without any warning, based upon usage thresholds that aren't published.
- Selling 4 years as "your next 5 years" (the account portal, and recent Black Friday episode which was finally resolved by adding an extra year to everyone's account who had recently purchased).
- Charging debit cards at the time of purchase without warning debit-card holders that the 30-day thing doesn't apply to them.

I think MJ is a tremendous value. But, Dan makes it very easy for his enemies to talk smack, spread FUD, etc. He makes it difficult for me to recommend it to other people because I just don't have the inclination to have that long, disclaimered discussion ("it's a great bargain, but.... there's the drama, and pocket picking, and lack of ethics, and lack of concern for reputation.").

I think Dan is very focused on near-term results. What sells more units today, with little regard for long-term reputation problems.

Mark

[tada]

Your comments belonged in the reviews or rants/raves area.

Sorry about posting to the wrong sub-forum. I've spent *days* attempting to read everything in this one.

- The 30-day trial (which ends today, every day).
- A random number generator showing the number of purchases (it used to be random, not sure now.).
- The "come on" appeals for expedited handling of your order (when your order ships just as fast if you don't buy it.).
- Charging before the item ships.
- Terminating customers without any warning, based upon usage thresholds that aren't published.
- Selling 4 years as "your next 5 years" (the account portal, and recent Black Friday episode which was finally resolved by adding an extra year to everyone's account who had recently purchased).

Yes, all of these are very slimy moves, and oddly enough, they part of the reason why I was asked to do research on magicjack.

The sad truth is, magicjack doesn't need to do any of these things to be successful. Their advertising campaign, reseller program, product quality, and most of all, pricing, are more than enough for them to be extremely successful without the slimy (but legal) nonsense. The slimy stuff is hurting them far more than it is helping them.

- Charging debit cards at the time of purchase without warning debit-card holders that the 30-day thing doesn't apply to them.

Fortunately, this claim is not true, or there would already be a ton of law suits, if not a class action law suit against magicjack. I'm a volunteer for a recognized non-profit organization which assists fraud victims, so we work with the banking and PCI (Payment Card Industry) all of the time and I know how their systems work.

magicJack Inc. does not actually charge the debit cards, instead they put a hold on the funds for the 30 days to make sure the charge will go through at the end of the trial period. The effect of a hold of funds on the account is similar to a charge since the funds must exist, and cannot be used. It is basically a guarantee that magicjack will get paid at the proper time.

Needless to say, this is not a particularly "up-front" way to deal with the problems of debit cards and thier "30 day free trial," but what they are doing is not illegal.

More importantly, anyone using a debit card rather than a credit card on the internet is already extremely foolish because the laws that protect credit card users do not apply to debit cards. In short if your debit card info fell into the wrong hands (and this happens far too often), the theif could easily empty your entire account. If you fail to notice the theft and file a complaint within 48-72 hours (depending on your bank), you are responsible for the loss.

Just owning a debit card is a risk, but using it for anything other than withdawing funds from *your* bank's ATM's is a far greater risk.

-tada

[az2008]

The sad truth is, magicjack doesn't need to do any of these things to be successful.

I agree. It's like MJ is its own worst enemy. I can understand that you don't get a lot for $1.70 a month. I could accept poor support, instability, etc. But, the sleazy behavior of the inventor is just unnecessary. It creates the kind of discussion where MJ is depicted as "... but, it's a great value." That's self-destructive. It creates the kind of reputation that MJ will have to keep its prices low to compensate for all the reputation problems.

The crazy thing is, this stuff is entirely in MJ's control. It's "low-hanging fruit." Just don't behave like a huckster. Have some concern for your reputation. And then the incumbents would have to work harder to spread FUD. And customers wouldn't have to get into all the disclaimers (about the MJ drama) when recommending it to others.

- Charging debit cards at the time of purchase without warning debit-card holders that the 30-day thing doesn't apply to them.

Fortunately, this claim is not true,

I'm sorry, but there are too many complaints about debit cards being charged (or, funds "pre-authorized") to believe it's not happening. Even MJ added a checkbox to the order web page asking "Is this a debit card?" If you check "yes" they tell you the offer not to charge you for 30 days doesn't apply to debit cards.

For some period of time they didn't have that checkbox, and generated a lot of complaints. Even after they added the checkbox there were complaints because people didn't check it. I personally saw someone complaining on dslreports about this. It turned out he hadn't checked that box, and seen that disclaimer.

This is a trend I see with MJ. Dan doesn't put himself in the customer's shoes. He doesn't think about the ill will generated by the customer doing the "wrong thing." Sure, the customer did the wrong thing. But, now you have a customer bad mouthing MJ on various public forums. It starts to look a lot like MJ doing the wrong thing.

Another example is when you elect to purchase the extra 4 years (at time of initial purchase). They email a redemption code. More than a few people didn't receive the email (because it was caught by spam filters), or they didn't understand its significance. A year later, they're complaining on public forums about being "ripped off."

Sure, they did the wrong thing. But, it's completely retarded to predicate your backend processes on the customer doing something. Just send the email to the Indian tech support group and let them *manually* update the system (if that's how it has to work).

When you see the other sleazy behaviors, it's easy to suspect that these business practices are by design (to gyp people out of 4 years, because 30% won't complain). It's probably not. It's probably innocent . Just poor management. But, that's the problem with engaging in all the other sleazy stuff. It doesn't generate a lot of sympathy for unintentionally bad business practices.

It all gets blurred into just MJ being a crappy company. ("But, it's a great value.").

Mark

[tada]

Mark,

I think you and I agree on just about everything. The one trivial exception is the debit card issue. I've also seen a lot of complaints out there on the web where people claim to have been immediately charged for the "free trial." Some of the claims could be FUD, but I kind of doubt all of them are. Personally, I think the vast majority of them can be explained by ignorance. Sadly, most people really don't really know the differences between debit and credit cards. They see a "VISA" logo on a plastic card, and mistakenly think the debit card works the same as a credit card. Even worse is the fact that most people have no idea what a "hold" is or how it works, so they mistake it for being a charge. The effects of a hold are damn near identical to an actual charge on the account, so the difference is not very clear to the consumer.

Pre-paid debit cards get sold at grocery stores, and are heavily abused by on-line fraudsters. We cannot hold a grudge against magicjack for protecting their interest and making sure that they get paid.

Even with the 40+ million in business that magicJack has done since the start of the year, the Payment Card Industry (PCI) will not tolerate fraudulent abuse of their system. They would have yanked magicjack's payment processing a long time ago if all those claims turned out to be real. Granted, there may have been a few "mistakes" here and there, but if those mistakes were done in volume over a long period of time (i.e. intentional), the PCI would shut them down.

In addition to the FUD campaign that seems to be perpetuated by magicjack competitors, another interesting question is the potential longevity of magicjack as a company?

magicJack only has five potential sources of income:

• Sales of USB devices
• Sales of Service
• Sales of (Targeted) Advertising
• Sales of Personal Information
• Sales of Geolocation Data

They do have quite a gold mine if they can continue to sell devices/service, and magicJack does have a rather elaborate network (I've mapped most of it), but they have also sold over a million customers (if my estimates are correct). The bandwidth necessary to support more than a million voice calls would be *extremelu* expensive.

If Google managed to scale through it's growing pains using a somewhat similar business model, the success of magicjack does not seem intractable. None the less, it is yet to be seen if they are as smart and lucky as Google?

I wonder...

-tada

[az2008]

I think you and I agree on just about everything. The one trivial exception is the debit card issue.

We agree on the topic of debit cards. It's just a matter of perspective. If MJ generates a ton of negativity by accepting debit cards from people who don't understand how they work, I tend to think it's MJ's responsibility for that. MJ could be 100% correct that they did nothing wrong. But, when there are bazillions of complaints, they might as well have done something wrong because that's all anyone is going to comprehend. (I.e., it's a Pyrrhic victory that MJ didn't do anything wrong because the cost to MJ's reputation was almost as bad as if they did.).

And, unfortunately, it's like the "boy who cried wolf." With the other (deliberate) sleazy behavior, it starts to lend credibility that Dan's lack of communication about debit cards is due to his obsession with "sell first, ask questions later."

And, the thing is, Dan knows the incumbents have a vested interest to tear down MJ. Why make it easy for them?

Regarding the debit cards, there should be a programmatic way to determine that a card is debit or credit. I know there are ways to determine if a card is Amex, Visa, et. al. Also ways to identify the issuing bank.

If there really is no way to know at the time of transaction, then MJ should make it much clearer, rather than relying upon the user to tick a checkbox asking if it's a debit card. Maybe make it more visible on the initial advertising (using an * and small-font, "not valid with debit cards.").

I'm pretty sure Dan doesn't do this because he's more concerned with selling units than his reputation. Which ties back into how it doesn't really matter if all these people are ignorant. Dan deserves the reputation problems that come with putting tactics over strategy.

In addition to the FUD campaign that seems to be perpetuated by magicjack competitors, another interesting question is the potential longevity of magicjack as a company?

That's why I urge caution when someone considers buying 4-5 discounted years in advance. VOIP companies tend to be volatile (SunRocket?). I can see making a calculated risk/reward decision based solely on a VOIP company's challenges *when they're really trying to stay in business*. To me, $60 isn't a lot to lose in return for 4-5 years of free service.

But, when the company seems to be engaging in self-destructive practices, with no regard for its reputation, the risk/reward ratio doesn't look as good. When Dan sells 5 years as 4 years, generating a *ton* of complaints (the "Black Friday" debacle), it doesn't give me a good feeling about his concern about his own reputation.

And then, compound that by all the BBB complaints. Yes, I know the BBB is like a "protection" racket. I don't respect them. But, the massive number of complaints and lack of response (reported by BBB) fits the same pattern. As you said, with $50 mil in business you'd expect a high volume of complaints. But, conversely, with $50 mil, what's a few thousand to buy some protection? Call it a "consulting" fee. As distasteful as it is. It seems better than the image problem of all those complaints -- when Dan's own behaviors indicate he's largely prone to doing things without regard to the image problems generated.

If Google managed to scale

I personally wouldn't compare MJ to Google. Google fostered collaboration among its users. MJ shut down its user forum, and hired a web developer to create that eye-sore of a uninformative web site.

But, there could be similarities. Such as the potential for MJ to become big, and purchased by a big name like Google or Walmart.

Mark

[tada]

it's a Pyrrhic victory that MJ didn't do anything wrong because the cost to MJ's reputation was almost as bad as if they did.

Very well said!

I personally wouldn't compare MJ to Google. Google fostered collaboration among its users. MJ shut down its user forum, and hired a web developer to create that eye-sore of a uninformative web site.

But, there could be similarities. Such as the potential for MJ to become big, and purchased by a big name like Google or Walmart.

Both Google and magicJack want to provide a useful service, and reap the benefits of widespread use and/or deployment. The similarities stop right about there.

magicJack is doing everything on the technical/design side as cheaply as possible. Similar is true for their customer relations and/or customer experience. Their main expenditure is most likely prime time TV advertising. In short, they're pushing sales without regard to pleasing customers, and all the while hoarding cash rather than trying to grow a business through small investments into the trivial but important things.

The supposed "support" offered to customers is really nothing more than regurgitation. Prior to finding and reading fair amount on this forum, I read the bulk of the "FAQ" system for magicJack (actually hosted via liveperson.com and uses some fancy HTML frame tricks to make it *appear* to be part of www.magicjack.com). zmaddmattz has already pointed out the unusually large number of "no post" users which have registered here and are supposedly leaching information. Unfortunately, he may be right; it seems an overwhelming number of fixes offered by the magicJack "FAQ" system may have actually came from posts to this site. Yep, as yet another cost cutting measure, the users here are being used as unpaid tech support.

The displayed stratagem of cost reduction and cash hoarding reeks of a short term business play. If sales tapper off, close the doors, turn off the lights, and walk away with a tidy profit.

If perchance enough customers tolerate their misgivings long enough for them to reach market dominance, the the exit strategy is changed to acquisition. Though their bad reputation might affect the acquisition price, said reputation would be diluted and fade through the acquisition and re-branding.

Either way it goes, they'll eventually make a nice profit on their investment. As customers, we might not like the results, but magicJack does seem to be managing their risks properly... Speaking of which, generating bad reputation may actually be nothing more than a calculated risk, i.e. the supposedly "lost" customers (who've already paid) versus the value of the "press coverage" per se.

Proving the old addages of, "Print anything you want about me, but spell my name right," and, "All publicity is good publicity," might be the real objective. Heck, it works for Microsoft. :-)

People around here can make all the "Inventor" jokes they want, but Dan is certainly no dummy. He is certainly not an inventor of any sort, but he definitely knows what he's doing in business.

-tada

[Darkman90808]

If sales tapper off, close the doors, turn off the lights, and walk away with a tidy profit.

Although I love *my little bundle of joy*, I don't see MJ being around for the long haul. Which is one of the reasons I will only buy one year of service at a time. I liken the business model to health club memberships. They have to keep grinding through new members to sustain themselves.

Okay, that may not be the best analogy, but it's the only one I could come up with late Sunday evening. What may save them is the ability to advertise, but with Magic Block and the ability to run it as a service, that doesn't hold much promise.

I'm not sure the reputation issue is a problem for the them. The members on this and other forums are a minute fraction of the overall users. IMO, the "typical user" (whatever that is) will only judge based on call quality and ease of use. As long as the grandkids can call Grammy on the cheap, I don't think the rest matters. And if MJ folds up their tent and leaves town, it's only forty or fifty bucks down the tubes. Which is roughly what I spent on drinks and appetizers this afternoon.

[BuffaloChuck]

I'd love to put MJ into 6,000-odd computers, but MJ's practices are so incredibly bad compared to their product. AZ's moniker of "not smart enough to hire me" is something I'm seriously thinking of adopting, too. Good grief - a new installation routine, a few USB-checking tweaks.

[dyoung]

Just to give a little story about holds on a Debit Card. I took my son to a bar. The bartender auth my card for $100. Once we hit the $100 he reauth my card again for $200. Well we was thursty and went over $200 so he again preauth for $300. Well guess how much they put on hold of my card $100 + $200 + $300 = $600. So for 10 days I was not able to access my money. And BTW We left shortlyt after we hit the $200 on drinks. But as you can see how easy it is to have something like this happen.

Now if Dan is even half right and they have 1 million units in operation. having only 1,000 BBB complaints is not bad. The bad part is he did nothing for along time to fix the issue. But he seems to be now working onthe issue with the BBB. So I will give the man a chance to redeam himself. Look you can't make everyone happy. And there are alot of people out here that just want MJ to not work so they can complain. Alot of people are not happy unless they are unhappy. And they want to bring everyone else down with them.

[az2008]

The bad part is he did nothing for along time to fix the issue. But he seems to be now working on the issue with the BBB. So I will give the man a chance to redeem himself.

I'm not very hopeful anything will change. Three days after meeting with the BBB (promising to reform, and having his "F" rating changed to an "NR"), like a crack addict he was back to his old ways, selling 4 years of service as 5.

I don't know if the problem is with Dan, or the people he's surrounded himself with. But, the organization has made some serious blunders. And, they don't seem to even consider them blunders. It's too bad because MJ is a great idea. It's too bad it doesn't have the right personality behind it. Dan and his crowd appear to be country clubbers who are just doing this to prove their first million (or billion) wasn't a fluke. One of the news interviews said as much. They're not really serious about changing the game for the industry. Just something to keep them occupied, and away from the high-ball glasses and the race track.

Mark

[dyoung]

Well I wonder how long it takes the BBB to finish their investagation and change the rating. And again less than a tenth of a percent of the people have filed a complaint with the BBB. The bad part is he did nothing about it until they talked to him.

But I guess I came into this with a different mind set than most. I figured if it worked great if not I would give the unit to someone and hoped it worked for them. In today's world most people throw more than $40 away each week, by buyibng somekind of junky item. So just figure it this way if it works you same some money if not you loose some. This is almost like playing the stock market

[az2008]

And again less than a tenth of a percent of the people have filed a complaint with the BBB. The bad part is he did nothing about it until they talked to him.

I'm just saying we don't know he's done anything about anything. It doesn't look good that he did the "4 years = 5 years" shtick three days later.

I'm not sure that 1/10 percent is that meaningful. I don't know what rate of complaint other businesses have. It takes a certain level of motivation for someone to take the time to contact the BBB. 1/10th of a percent certainly isn't everyone who's been disappointed.

Also, based on Dan's other behaviors I'm not willing to believe there are a million (or whatever) units in operation just because he says there is. He could be utilizing his usual "optimistic" language (where features are "coming soon," etc.).

He could mean that many were "sold," not counting 30-day returns. Or, people who stopped using it after 3 months because a "Lucky You" upgrade broke them (or they couldn't live with 60-minute caps). Or, not counting the people who didn't renew after one year.

You can't take Dan seriously about anything. He doesn't seem to regard his own reputation. I certainly wouldn't.

So just figure it this way if it works you same some money if not you loose some. This is almost like playing the stock market

I agree with you. I've always said it's not a lot of money to lose. I've used it seriously since August, disconnecting my landline Sept. I've recouped the money I spent on MJ + an additional 4 years of service. It's pure profit.

I'm just not sure how unique I am among MJ users. Connecting to other proxies, it sounds like a lot of people are putting up with poor sound quality. And, all the other problems we see with people who's service stops for no reason.

Mark

[JohnnyFreightTRAIN]

Unfortunately, he may be right; it seems an overwhelming number of fixes offered by the magicJack "FAQ" system may have actually came from posts to this site. Yep, as yet another cost cutting measure, the users here are being used as unpaid tech support.

I believe you are correct 100%. I know one tech support representative suggested that I use the *67 fix that stewart discovered. She said it was how they made calls to some Canadian numbers... Sound familiar?

[mberlant]

Also, based on Dan's other behaviors I'm not willing to believe there are a million (or whatever) units in operation just because he says there is.

One thing we pretty much know for certain is that YMAX is MJ's only provider of DIDs. I am just starting to formulate how to perform the calculation, but it is a matter of public record how many telephone numbers YMAX owns in total. If that number is significantly fewer than one million we have our answer, don't we?

[DanD]

Basically, it appears that the main interest of magicJack executives, is to sell as many units as possible, while investing as little as possible back into the quality of service, and when the time comes, they will take the money and run (of course they will run as very rich men).

[mberlant]

Also, based on Dan's other behaviors I'm not willing to believe there are a million (or whatever) units in operation just because he says there is.

One thing we pretty much know for certain is that YMAX is MJ's only provider of DIDs. I am just starting to formulate how to perform the calculation, but it is a matter of public record how many telephone numbers YMAX owns in total. If that number is significantly fewer than one million we have our answer, don't we?

Well, so much for that method of disproving the "number sold" number. As of 1/31/09, YMAX owns about 5.3 million telephone numbers across the United States. They have lines in 46 states and DC(all but AK, HI, NH and VT).

So, it is possible that MJ has leased and activated 40% of them. To paraphrase Mack and Jamie, "This myth is still plausible."