Not only do they scam you on the way in, they also scam you on the way out, canceling with them is just about impossible.
Credit card companies have pretty strict rules about this sort of thing and I would really like to know if they are burning through merchant accounts, are labeled high risk (with associated fees) or if they are around the industry norm for e-commerce when it comes to chargebacks, refunds and customer satisfaction within the cohort that does not get something delivered to their door each month.
I suspect (but don't have proof) that if the 200K or so silent subscribers (those who don't opt out but also don't get anything delivered) were attended to the fact that there is a silent charge every month that they would cancel en masse and do approximately 1.2 million chargebacks (the costs of those chargebacks alone would take out justfab.com like a pin takes out a balloon).
The bottom comment in that thread about the class action is a nice sample of what this company stands for:
"I have been repeatedly trying to cancel my membership with JustFab.com for 5 months. Every time I call the customer service rep continues to try and diswade my request to the point of 10 full minutes at which point I always tell them “JUST CANCEL MY MEMBERSHIP” and hang up. I believe they are paid commission on every call they take that results in a hang up. I’ve emailed repeatedly and they just won’t cancel and continue to bill me. I am putting a complaint through my credit card and I am hoping this will stop these illegal business practices."
If you're a victim of this scam please realize that:
1) you have consumer protection agencies where you can file complaints
2) you can charge back up to 6 months and every chargeback will cost justfab an additional $25 to $35 per charge on top of the refunded money. In case of 3D secure transactions the initial charge was equivalent to a 'card present' transaction but subsequent rebills are not and you should be able to get those back anyway.
3) if the number of chargebacks goes over certain absolute numbers there will be an investigation and if it goes higher still there might be a cancellation of the merchant account
4) that you can help by telling your friends about the scam, making sure not to turn it into accidental advertising for them
And even if you're not a victim of this scam:
5) you can probably save yourself money if you go over your credit card statement to look for charges like these.
I'm working on a blog post about the venture capital world as seen from the other side to cure some common misconceptions about the type of people that are active in venture capital, this whole story has me wondering if there wouldn't be more good in doing a 'VC's I won't work for' post instead. Yuck.