Battle - MJ+ Contradicting themselves once again!

[battle]

MagicJack is at it again. While placing my order yesterday via the toll free #, I was given an option to purchase 3 day shipping and when I did, the recording said I would receive my new Magic Jack Plus 3 days after placing my order. However, the email that I received (see below) now says it will not be shipped for 2 weeks. This order is getting cancelled and NetTalk is going to get my business. Anyways, for those wanting to see exact charges, they are reflected in the email below.

A couple of other contradictions or issues that I found are:

1. Below it shows the Charge Date as 08/12/2011. However, my bank shows that my debit card had already been charged on 08/10/2011

2. The order total in the email says $85.78, however, my bank shows that MagicJack charged $77.90 ($7.88 less than what MagicJack said I would be charged in the email, the only way I can see that being the case is if they did not include the $3.93 Regulatory and Compliance Expense and the $3.95 magicJack Express Tracking Mail which together equals $7.88 )

What a mess.

Important: Please reply to this email right away if you want any modifications from your order below. You do not have to take any action if you do not want to make any changes. Please refer all technical questions to the link below when you get your magicJack PLUS. Thank you for your interest and enjoy your magicJack PLUS when it arrives. Dan Borislow, Inventor


Dear XXXX XXXXX,

We will begin shipping the new magicJack PLUS in approximately two weeks and your 30 day free trial will begin at the time of shipment. Use magicJack PLUS with or without a computer and enjoy FREE local and long distance calling, your own phone number, FREE voicemail, FREE call waiting and more.

Free Trial Jacks will not be billed to your credit card until the **30 Day Free Trial expires. We will however place an authorization on your credit card (may appear as "pending charge") for the free trial. If you don't love the magicJack PLUS (we know you will), simply return it within thirty days - no questions asked.




Order No.: XXXXXX
Reference ID: XXXXXXXXX
Total magicJacks Ordered: 1

Order Shipping Information

Customer Name: XXXXX XXXXXX
Address 1: XXXX XXXXX
Address 2:
City, State, Zip: XXXXX, XX XXXXX
Country: United States
Phone#: XXXXXXXXXXXXX


Order Summary

Qty Item Description Price Ea Total Price Charge Date
----- -------------------------------------------------- ---------- ------------- -----------
1 magicJack PLUS/EasyPay 30 Day Money Back Guarantee 69.95 69.95 08/12/2011
1 Regulatory and Compliance Expense 3.93 3.93 08/12/2011
1 Shipping & Handling 7.95 7.95 08/12/2011
1 magicJack Express Tracking Mail 3.95 3.95 08/12/2011
1 Method of Payment - Debit card .00 .00 08/12/2011
--------------------------
ORDER TOTAL: $85.78



Important: Please save this email for 60 days as it contains your Order Number


Some useful information:

You may check on the status of your order at any time by clicking here Order Status and entering your email address and order number. For your convenience, these have been included in this link.

For questions regarding technical information click here Technical Help and a representative will assist you. Please note that this link is specifically for technical issues (not for order/billing information - see above for order/billing inquiries).

[dtm]

But...when they do finally ship it you will get the 3 day shipping you paid extra for. It's a MagicTrickJack!

I don't blame you for telling them to take a hike!

[VaHam]

Anybody know what the "Regulatory and Compliance Expense $3.93" encompasses?

Does this vary based on your location?

Are they now charging this on all MJ's or just the Plus?

[battle]

Anybody know what the "Regulatory and Compliance Expense $3.93" encompasses?

Does this vary based on your location?

Are they now charging this on all MJ's or just the Plus?

I'm assuming that is the 4.5% tax that I was told would be applied to all orders and shipping, so if it is and it applies to all orders than it's probably safe to assume that it applies to everyone regardless of their location.

[scotty200]

it just a way to get more money from people i live in Canada and shod not have to pay it but they told me every one has too so every one know it just a money grab just like i have to pay 10.00 extra to get a Canada number when i first got the MJ they did not have the Canada numbers and was told when they did have them i could change it for free but in the end i had to get a new jack and pay 10.00 extra so they are just dishonest and we cant trust what they say and there dates don't pan out ether lol

thanks Dan

but with all the trouble i had it was not with the phone service that worked good for the most part

i am looking forward to get the + so i can port my mj number to it i also my get a NT too but i don't know how good it will work in Canada and if i can get a number from my area

have a good one everyone !

[VaHam]

Anybody know what the "Regulatory and Compliance Expense $3.93" encompasses?

Does this vary based on your location?

Are they now charging this on all MJ's or just the Plus?

I'm assuming that is the 4.5% tax that I was told would be applied to all orders and shipping, so if it is and it applies to all orders than it's probably safe to assume that it applies to everyone regardless of their location.

That wouldn't see to make sense to me since:

3.93/69.95*100=5.61% - if the tax is on just the device

3.93/(69.95+7.95+3.95)*100= 4.80% - if the tax were based on all but the tax itself

3.93/85.78*100=4.58% - even if it tax on everything including the tax itself

So that doesn't add up.

Also if you look at another customer's charges from the thread http://www.phoneservicesupport.com/orde ... 10884.html

1 magicJack PLUS 30 Day Trial 49.95 49.95 07/29/2011
1 Five Year Platinum Preferred Plan 99.75 99.75 06/30/2011
1 Regulatory and Compliance Expense 4.79 4.79 06/30/2011
1 Regulatory and Compliance Expense 2.78 2.78 07/29/2011
1 Shipping & Handling 7.95 7.95 07/29/2011
--------------------------
ORDER TOTAL: $165.22

That invoice show 2 "Regulatory and Compliance Expense" charges so it appears that their is one for each of the items ordered on the two dates, and it is assessed on the S&H as well as the other items.

2.78/49.95+7.95*100=4.80%

4.79/99.75*100=4.80%

So it seems there is a 4.8% charge not 4.5% tax as the added charge.

[nailgunner]

The 4.8% has been mentioned a few times earlier and is probably the correct number.

The last thing MagicJack wants to do is start collecting sales tax for every state or GST/HST for each Canadian province. As it is, with physical offices in Florida, I'm not sure how they are avoiding collecting sales tax on at least Florida residents.

It's possible that the 4.8% covers the regulatory fees they are getting nailed with plus the 6% sales tax on sales to Florida residents. Which would mean that the rest of the US and Canada are paying part of the Florida sales tax for the Florida residents. Florida residents thank you. It also obviously means that as they start getting hit with more 911 and other fees that the 4.8% will likely go up.

[battle]

Yeah, I wouldn't be surprised if it is 4.8% and not the 4.5% I had mentioned. I most likely forgot the correct %.

[cell14]

The 4.8% has been mentioned a few times earlier and is probably the correct number.

The last thing MagicJack wants to do is start collecting sales tax for every state or GST/HST for each Canadian province. As it is, with physical offices in Florida, I'm not sure how they are avoiding collecting sales tax on at least Florida residents.

It's possible that the 4.8% covers the regulatory fees they are getting nailed with plus the 6% sales tax on sales to Florida residents. Which would mean that the rest of the US and Canada are paying part of the Florida sales tax for the Florida residents. Florida residents thank you. It also obviously means that as they start getting hit with more 911 and other fees that the 4.8% will likely go up.

I seriously doubt that. Based on different taxes on my cell phone and international long distance bills I tried to get to those 4.8% without any success. There is no such thing like letting people in other states provide for FL state tax; you have to collect it directly from every customer( unless he has tax exemption certificate) otherwise you get quickly in major troubles. When they sent me way back the MJ ( before it came into stores) they indeed charged me the 6 %.
This 4.8% looks to me like a junk fee - effectively a price increase.

[battle]

I seriously doubt that. Based on different taxes on my cell phone and international long distance bills I tried to get to those 4.8% without any success. There is no such thing like letting people in other states provide for FL state tax; you have to collect it directly from every customer( unless he has tax exemption certificate) otherwise you get quickly in major troubles. When they sent me way back the MJ ( before it came into stores) they indeed charged me the 6 %.
This 4.8% looks to me like a junk fee - effectively a price increase.

Either way, I'm sure if the extra fees/taxes/surcharges or whatever they are, are not on the up and up, it will eventually come back to haunt them in the form of a class action lawsuit or if there are enough complaints, in the form of a huge fine from the government. It's happened many times in the past with other communication and ISP companies. Either way, the recording did say that there would be a 4. something % tax which they were federally required to charge on all orders - that could explain certain federal communication taxes and fees, but cell14 does bring up a valid point, since when does the federal government require a business to charge taxes on shipping? The recording specifically said that the tax charge was also on the shipping charges as well....hrmmm. I am not required to charge taxes on shipping to my customers and I am not aware of any law on the books that requires a U.S. business to collect taxes on parcel shipments other than the couriers themselves.

[nailgunner]

I seriously doubt that. Based on different taxes on my cell phone and international long distance bills I tried to get to those 4.8% without any success. There is no such thing like letting people in other states provide for FL state tax; you have to collect it directly from every customer( unless he has tax exemption certificate) otherwise you get quickly in major troubles. When they sent me way back the MJ ( before it came into stores) they indeed charged me the 6 %.
This 4.8% looks to me like a junk fee - effectively a price increase.

Have you never heard of a store running a "we will pay your sales tax" sale? They do not collect a penny of sales tax from the customers but the company still has to pay it to the state.

And with what I'm suggesting you wouldn't be able to add up the 4.8%. MagicJack has claimed all along that they are not subject to collect from customers the same regulatory fees as "phone companies". All I am suggesting is that they are taking all the fees that THEY are subject to, not their customers, with the possible exception of FL sales tax, and coming up with a number to cover it and charge the customers to recover their cost. A junk fee, maybe, a price increase, definitely. It's easier to adjust that number from time to time than the set one they would use in advertising.

If they charged you the 6% way back, then they obviously aren't adding it to their 4.8% calculation. But they weren't charging this regulatory fee then either, so maybe they changed.

Edit: I would be curious if any Florida residents have been charged any sales tax on their internet purchase, in like the last 3-6 months which I think is the time frame when they started adding the surcharge.

Edit2: I did see after a search that some states do not allow advertising of "we pay your sales tax" type sales, so maybe you haven't heard of it. I lived in one state that, a few years ago, did it all the time. So I would assume that if Florida doesn't allow it, that MJ is still collecting it.

[nailgunner]

I am not required to charge taxes on shipping to my customers and I am not aware of any law on the books that requires a U.S. business to collect taxes on parcel shipments other than the couriers themselves.

Some states do require sales tax to be charged on shipping. Hopefully yours isn't one of them. The federal government obviously does not. I wouldn't believe anything MJ says in a recording or an advertisement, or now what appear to have been some paid reviews.

As per my prior posts, my opinion, and it's only that, is that there would be no way to come up with their 4.8% number. I think it's just an attempt to recover costs, a number not exactly pulled out of thin air, but probably close. Part could be regulatory fees/taxes. Part could be his car payment or upkeep for the soccer team.

I agree with you that they need to be careful in their recordings that it is a required federal fee and are opening themselves up to issues since that sounds like total BS. If it's a required federal fee, it should be collected on all sales, not just internet ones. Of course they could be increasing the rate on the internet sales to cover the non-collection on the retail sales. In which case I'm sure the retail purchasers thank the internet purchasers.

After looking at the email receipt again, "regulatory and compliance expense" covers a LOT of possibilities. Compliance could just be their estimated cost of complying with various federal and state paperwork. The fact that they call it one thing on the email receipt and another on the recording would be about standard for them.

[VaHam]

The third part of my question has gone unanswered so far. Again does anyone know if this "Regulatory and Compliance Expense" is being added to both the original MJ orders and the Plus or just the Plus?

[nailgunner]

The third part of my question has gone unanswered so far. Again does anyone know if this "Regulatory and Compliance Expense" is being added to both the original MJ orders and the Plus or just the Plus?

The 4.8% came up as early as last October on a regular MJ:

http://www.phoneservicesupport.com/mj-s ... t9325.html

so it's probably safe to assume it's both.

[VaHam]

The third part of my question has gone unanswered so far. Again does anyone know if this "Regulatory and Compliance Expense" is being added to both the original MJ orders and the Plus or just the Plus?

The 4.8% came up as early as last October on a regular MJ:

http://www.phoneservicesupport.com/mj-s ... t9325.html

so it's probably safe to assume it's both.

Thanks I had missed that also the 4.8% is still a mystery since they already charge 6% tax to FL customers.

[nailgunner]

Thanks I had missed that also the 4.8% is still a mystery since they already charge 6% tax to FL customers.

You're welcome. I honestly think it's a combination of Cell14's opinion and mine. It looks like a "junk fee" that they are dumping a lot of stuff into in an attempt to try and recover expenses without having to actually raise their base price.

I'll give a buck, maybe two, to anyone who can come up with the exact calculation of the 4.8%. I don't think it can be done.

My opinion is that they either set it just below 5% so that there wouldn't be too much bitching, or that it was close enough to cover whatever expenses they want to get back, and based on estimated internet sales, that % would do the trick. Just the receipt title of "Regulatory and Compliance Expense" is borderline double-talk.

The only thing I'm left to wonder about is why the heck they are saying it is a required federal fee in the recording. Sounds like an outright lie to me. The last I heard, they don't think they are subject to collecting any federal telcom fees.

Edit: And for some real boring clarification. IF, they weren't collecting the 6% internet sales on Fla residents, it wouldn't have taken much of the 4.8% to recover it. With 50 states, maybe not Alaska, and maybe all 13 Canadian provinces and territories, one would think Florida would make up 1 out of 25 of their sales, at best? 1/25*6%=.24%, which would have been a minor part of the 4.8%. Of course it seems to be a moot point.

[VaHam]

the 4.8% is still a mystery since they already charge 6% tax to FL customers.

I honestly think it's a combination of Cell14's opinion and mine. It looks like a "junk fee" that they are dumping a lot of stuff into in an attempt to try and recover expenses without having to actually raise their base price.

I'll give a buck, maybe two, to anyone who can come up with the exact calculation of the 4.8%. I don't think it can be done.

My opinion is that they either set it just below 5% so that there wouldn't be too much bitching, or that it was close enough to cover whatever expenses they want to get back, and based on estimated internet sales, that % would do the trick. Just the receipt title of "Regulatory and Compliance Expense" is borderline double-talk.

The only thing I'm left to wonder about is why the heck they are saying it is a required federal fee in the recording. Sounds like an outright lie to me. The last I heard, they don't think they are subject to collecting any federal telcom fees.

Yes that is really what I am curious about. Are they now getting hit with something new from the feds? Maybe it is just their way to recover legal fees from things like Kanawha County.

I still have heard nothing new regarding the 911 issue with Kanawha Coounty vs MJ. Last news was they had agreed to a postponement of the March 2011 hearing; to attempt to reach a settlement. Maybe they did reach a settlement and were more successful in getting it kept quiet than they were with Boing Boing and the slapp suit.

I have mixed emotions about 911 charges anyway. It would be fine if they charged for the expense of the telephone equipment and switching fees etc from the phone company; but municipalities now put everything including the kitchen sink into those fees.

I chaired the committee for my county when 911 was first adopted and the cost from the phone company to provide call steering and a database for each line was about $0.30 I am sure it has gone up but some now charge several dollars/mo because they add the cost of things which should be funded by general revenues.

EDIT: I did some more digging and apparently MJ did in fact reach a settlement with Kanawha County County 911 although they should have reported the settlement long before now since that states within 30 days from the April 2011 date.
- also added link for info re: Boing Boing issue.

[cell14]

Just the receipt title of "Regulatory and Compliance Expense" is borderline double-talk.

The only thing I'm left to wonder about is why the heck they are saying it is a required federal fee in the recording. Sounds like an outright lie to me. The last I heard, they don't think they are subject to collecting any federal telcom fees.

Those junk fees became an plague. Dan did not invent them, he probably just looked at his cell phone bill an got another great idea. There is a huge difference between government mandated taxes and those junk fees. I am really expecting any time a vendor bringing me an invoice with " costs of compliance with traffic laws" as an additional charge.
Dan walks with his double talk a thin line once again. You cannot pretend collecting taxes for the government while just pocketing extra cash.
FL is pretty drastic in collecting sales' taxes. Every invoice for taxable goods or services must have a sale's tax spelled out( unless the recipient is exempt). You can " compensate" with a cash register discount but you still have to have the sales tax on it.
Even manufacturer's coupons get taxed.

[VaHam]

First I am not a lawyer so the following is only my personal opinion!

Magicjack IMHO walks a thin line on their status as a non-interconnected voip service. Remember the little box you had to check in order to make out going calls when you signed up. As I understand it they claimed they are not a "Interconnected VOIP service", during the FCC case between them and AT&T; since MJ provides incoming calls and if you elect to opt in then they arrange for YMAX to allow you to make outgoing calls as well. You have no agreement with YMAX it self since your entire agreement is between you and MJ via MJ's TOS.

CNET Perspective: VoIP providers face headaches galore

The FCC interprets the concept of "interconnected VoIP" broadly, to include any VoIP service offering that is capable of making or receiving two-way calls over the public telephone network, whether the customer actually does so or not.

Emphasis added.

Read more: http://news.cnet.com/VoIP-providers-fac ... z1UyIjsBat


If they are not classed as a "Interconnected VOIP service" then they are not subject to certain Federal regulations. For instance as I understand it they would not be obligated to provide E911; even though they do.

Probably more importantly, would not be the requirement to participate (pay into) the Universal Service Fund (USF); which supplements rural customers and schools etc.

I wondered if Magicjack's status as a non "Interconnected VOIP Service" has changed and that is where these fees are coming into play or not. I think we are all guessing as to what they actually cover.

If it has not changed then this thin line regarding providing two seperate services (one by MJ the other by YMAX) is the one they would still be walking. I assume there will be some similar opt in option when registering the new Plus devices and they will control the outgoing calls feature thru the new device based on whether you opted in or not. If they don't then I would think that would place them in jeopardy with regard to their status.

More info on the issue - FCC.gov

Typically, interconnected VoIP technology works by either placing an adapter between a traditional phone and Internet connection, or by using a special VoIP phone that connects directly to your computer or Internet connection.

[cell14]

Even lawyers have hard time to sort this out. I think that a major overhaul of telecom taxation is inevitable. The land lines are disappearing. Cell phones are not a problem, just the opposite- governments make far more money there. But VOIP is a real problem , not just for the federal government.
Here, I used to pay on my land line the state telecom tax, gross receipt surcharge , county tax, E911 surcharge and county ordinance surcharge. With things like MJ, GV etc this is all gone and they started worrying about their retirement benefits.
If Dan really used those 4.8 % to pay for government taxes he would have less of a problem to exactly list and specify them. I believe that this is just one of his numerous shenanigans.

[VaHam]

Even lawyers have hard time to sort this out. I think that a major overhaul of telecom taxation is inevitable. The land lines are disappearing. Cell phones are not a problem, just the opposite- governments make far more money there. But VOIP is a real problem , not just for the federal government.
Here, I used to pay on my land line the state telecom tax, gross receipt surcharge , county tax, E911 surcharge and county ordinance surcharge. With things like MJ, GV etc this is all gone and they started worrying about their retirement benefits.
If Dan really used those 4.8 % to pay for government taxes he would have less of a problem to exactly list and specify them. I believe that this is just one of his numerous shenanigans.

Yes I am not sure how much longer Dan can get away with non-interconnected assertion. The West Virginia case would have brought the issue before a commission if it were not settled out of court. The county 911 was asserting that MJ was in fact Interconnected and therefore subject to E911 fees. If this were found to be the case then they would have also been subject to other Federal provisions as I understand it.

I am sure there are those here who will strongly disagree but the new MJ+ adds a standalone device allowing two way connection and IMHO certainly fits the FCC definition of Interconnected I showed above which weakens MJ's position.

Google Voice appears to me to be in a better position since you can easily have just one way forwarding to you and they provide no softphone or hardware on your premises to facilitate using their web service features.

That is why I feel the symbiotic relationship between GV and OBi is beneficial to GV as well, and may simply continue. OBi which is in fact a separate entity, unlike the MJ/YMAX connection, provides the hardware/software which allows one to connect a phone to Google service easily but they do not provide any connection to the POTS. Their own OBi network does not connect to the POTS.

[sabresfan]

I don't think MJ is going to be able to escape the e911 fees anymore. When the Plus is in full swing they are going to be a target for all the municipalities that are short on cash. Other than hardware/price differences what would be the difference between MJ+ and Vonage. They could make the argument imho with the dongle/computer setup but not as a stand alone ata. In the end MJ would be better to just charge the applicable fees for e911 and move on. Ooma even charges monthly fees now. I just don't see how MJ can avoid it anymore once the plus hits stores.

[cell14]

I don't think MJ is going to be able to escape the e911 fees anymore. When the Plus is in full swing they are going to be a target for all the municipalities that are short on cash.

The thing is that once they are subjected to E11 fees they will be most likely subjected to all other federal, state and local taxes, as VaHam correctly noted
As a matter of fact, the E911 is probably the weakest one. How would you determine which county is eligible to collect it? Based on area code and exchange ? We know that this would not work with MJ where everybody freely chooses and many area codes/exchanges are not available at all.
Based on billing zip code of the credit card? Well, my county will miss out since my p.o.box is across the county line. And what about all the international users ?
A complete overhaul of the whole telecom taxation system is needed, otherwise this will become a real mess.

Google Voice appears to me to be in a better position since you can easily have just one way forwarding to you and they provide no softphone or hardware on your premises to facilitate using their web service features.

That is why I feel the symbiotic relationship between GV and OBi is beneficial to GV as well, and may simply continue. OBi which is in fact a separate entity, unlike the MJ/YMAX connection, provides the hardware/software which allows one to connect a phone to Google service easily but they do not provide any connection to the POTS. Their own OBi network does not connect to the POTS.

If they push the taxation GV may have to become a one way service.
I do not think that the taxman would accept the Obi/GV scheme because that would open the door for others who may try to set up similar constructions.

[VaHam]

If they push the taxation GV may have to become a one way service.
I do not think that the taxman would accept the Obi/GV scheme because that would open the door for others who may try to set up similar constructions.

The narrow distinction the FCC makes is the "Interconnected" nature of VOIP services. They seem to recognize that adding POTS capability to other types of online applications as being different than providing traditional phone service to a location.

Notice that the USF fees are assessed on dry loop DSL for instance even though the dry loop provides no phone service it does interconnect one with the Internet. IMHO that is the proper place for that assessment, if there has to be one; "to the last mile" of service whether it is via cable, twisted pair, satellite, cellular or even wide area WiFi; since these all have to do with getting service into a location. So I think the FCC has it right in regards to the USF.

This non sense of a Federal Line Fee, which goes to the company who provides that last mile not the FED and is only called that because the FEDs put a cap on it of $6.50, is just a junk fee. IMHO it is just a part of the company's fee disguised to look like something else. It is only collectible by those providing the "last mile" so it is not something which VOIP services should be involved with anyway.

IMHO the cost of E911 should be paid for from general funds rather than as fees tacked on to telephone service. The fact that someone needs help is not because they have phone service no matter what type; but rather because they have an emergency and seek help from police or emergency services. I well understand that in the beginning communities sought ways to fund 911 service and when their states allowed them to assess 911 fees that solved their funding problems; but they have IMHO included way to many things under this banner now.

[cell14]

Notice that the USF fees are assessed on dry loop DSL for instance even though the dry loop provides no phone service it does interconnect one with the Internet

That is interesting because I have dry loop DSL and they never assessed USF,
so I wonder whether the company just eats it, which would be unusual

[VaHam]

Notice that the USF fees are assessed on dry loop DSL for instance even though the dry loop provides no phone service it does interconnect one with the Internet

That is interesting because I have dry loop DSL and they never assessed USF,
so I wonder whether the company just eats it, which would be unusual

Look in the fine grey print at the bottom of dsl extreme's website regarding USF fees of $2.88 being added. Doesn't show up until you have "pre qualified" your location for DSL service and are shown a price.

[cell14]

Look in the fine grey print at the bottom of dsl extreme's website regarding USF fees of $2.88 being added