Scamville: The Social Gaming Ecosystem of Hell
techcrunch.com
techcrunch.com
It isn't just affiliates, either: many shareware developers have inadvertently caused their customers damage when their payment processor tacks on high-margin low-value items as a rider to transactions. I covered this on my blog here:
http://www.kalzumeus.com/2008/03/09/regsoft-scam/
In addition to the outright fraud discussed in that example, many payment processors will do things like offer customers $10 for "download recovery" service, where they promise to keep your download on file for a year so you can get it again. This obviously costs them essentially nothing. That isn't zero value (I suppose, theoretically, the shareware developer could go out of business and stop offering downloads), but it mostly takes advantage of unsophisticated customers who THINK they are buying "Get my software back if my computer melts" and are unaware that almost all shareware authors will do that for free.
(Wow, I'm finding myself agreeing with Arrington.)
Thinking about it, this might explain their attitude towards users...
She should heed the advice: "Never pick a fight with people who buy ink by the barrel."
Only if you've never worked at a game company selling virtual currency. The idea that only 5 incidents of children stealing their parents credit card or cell phone number occurred across 105 million transactions over two years is laughably ridiculous in the extreme.
Those numbers were clearly pulled out of the "shit, doubleshit, and bullshit" hat. We ran a similarly sized game and were inundated daily with complaints from parents whose children had stolen their credit cards and cell phones to buy coins in our games.
Maybe since the children are being scammed via third party, the parents don't know who to complain to?
At least the children are arguably less culpable given the age of majority.
Facebook Platform is such a joke. Sad, too, when you know what the original vision looked like.
Before purchasing the software (to test) I contacted the company to ask about the software itself, as well as their refund policy. I was emailed back by Christian Walter, who said they offered a 30-day money back guarantee.
I purchased the software, tried it, determined that it did not meet my needs, to put it nicely, and certainly was not something that was worth any money. Therefore, I emailed the company to request my refund. This is where the fun starts.
When I requested my refund, Christian at MindJet effectively denied the request (in my opinion) and told me I would have to download a form, swear on it, sign it, and fax it to an international number.
On the form it said all fields must be completed or else no refund. One of the fields was “Customer Number,” which it says is listed on your invoice. That is not true (at least not on the invoice I have, nor anywhere on "my" account on their website).
The other part of their scam (that's what I call this kind of business practice) is that when you buy the product they throw in a “free” year of support. What they don’t tell you is that this is really a subscription for paid support, with the first year free, and that they will bill you annually starting next year unless you: (1) figure this out, (2) figure out how to opt out, and (3) do it in time.
I’m still dealing with this MindJet issue, gathering info for a detailed blog post with screenshots. Tune in later to see how the story ends, if they refund me on their own or I have to dispute the charge with Mastercard (I’ve already met the requirements to dispute the charge and am just waiting to see what they will do).
In meantime, I can tell you that, based on this experience (on its own and in comparison with every other company I have ever done business with), I consider MindJet a scam company. If their business practices are legal, they seem at least highly deceptive, tricky, and unethical (to me). Again, this is only my experience and opinion, so take it for what it's worth.
If MindJet had just refunded Chris's money, no matter whether or not he is actually 'right', then this post, and the blog post that's likely to follow it, wouldn't even exist. The worst that Chris could say is, "I bought their software, it sucks, they... uh... gave me my money back. Those bastards."
Being scammy just doesn't pay off, at least to my way of thinking.
Could it be that I wanted to evaluate all of the mind mapping products on the market before deciding which one to go with? Is that not a what many people do before they make any major decision, which to me is what picking a new piece of business software is? Could it be that I did some initial research and came up with a short list of candidates (Freemind, XMind, Mindjet MindManager, Dropmind, and NovaMind)? Could it be that I have now concluded my evaluation and MindJet was not the product for me and I simply tried to exercise my money-back option?
I am not "indignant," I am reporting facts, facts which, IMHO, mean "scam." If other customers who are eligible for refunds and want refunds are ok with having to fill out, swear to, sign, and fax a form to an international number to get that refund, then that's ok (for them). If they are ok with the refund request form saying they must supply a customer number from their invoice and there is no customer number on their invoice, fine. I'm just reporting those facts. Doesn't seem like a good policy to me, but if it's fine with you, fine. But don't get pissy and accusatory with me.
Lastly, nothing has backfired. I will get my refund from them or through MasterCard chargeback. The reason I'm spending my time telling people about this situation is in case anyone finds it relevent in their dealings with MindJet or in how they handle refund policies and procedures, as a previous commenter stated.
MY INITIAL QUESTION TO MINDJET:
I am interested in your mind-mapping software, but it is expensive. Does it come with a money back guarantee?
THEIR REPLY:
When you purchase MindManager in the Mindjet online shop you can cancel your order within 30 days after the purchase.
FOR THE RECORD robotrout's ORIGINAL COMMENT TO WHICH MY ABOVE REPLY IS DIRECTED:
I use Mindjet and have for years. They're not a "scam company". If anybody was scamming, it seems like it was you. Your obvious plan was to get the software, write a bad review of it, and then ask for your money back. You get an article for your blog with no financial impact to your wallet. Now, when that backfired, you're indignant. I have to say, I'm not feeling that sympathetic to your predicament.
Refunds cost time and money to process and are a demoralizing pain in the tail (fwiw, we provide our rarely requested refunds immediately with no hassle and no questions asked) and a purchase with an immediate request for a refund typically screams 'pirate'.
Your opinions seem belligerently set in place, so all I can offer is the Independent Software Developer's Curse: "May you have customers who act just as you do".
Dropmind is my by far personal favorite paid product (I'm on their free trial). And their developers are super nice and helpful (we exchanged a few emails, questions, replies, and screenshots).
Which ones are your guys favorites?
For me, however, this "me, me, me" mentality is the core of what's wrong with America right now. There are too many people who only care about themselves, who won't spend a dime of their money or a second of their time to stand up for someone who can't do anything for them. Not so much here and in our community, which mostly has an abundance mentality and knows that it's not about what you can get, but what you can give, and do give.
That is why I'm spending my time, opening myself up criticism, etc. I will get my money back regardless. It's $129, who cares, really. I've been through an IPO, made multiple successful real estate and stock investments, and done over a billion dollars in deals since 1999. Who the fuck cares? I quite that and moved to Europe in 2006 and haven't "worked" since. Again, who cares? Nobody. It doesn't matter. The point is not about money, it's about standing up for other people, people, who might not have the ability, time, energy, or whatever to stand up for themselves or anyone else. Heck, it's even about standing up for those "gotta look out for #1" types, I hope to help save them some money, too. More importantly and critically, I hope to help a few realize that the only way we can really change the world and make it a better place is by standing up for each other, helping each other, not ourselves. I also hope to give a company or manager or two a second thought about their business any shady business practices they are considering, help them realize that they will "get" more by acting ethically.
You may call me a dreamer and an idealist, that I am, but I'm not the only one. And I hope to "always" believe that we can make positives differences in each others' lives. That's what it's about. Really.
Yes, I hate getting ripped off (or feeling like I am getting ripped of, if it's more accurate). And I will not take it. I will suffer costs in excess of the rip off in order to benefit the community. I think the community benefits from better, more ethical and clear, business practices. I think by standing up here, I encourage that.
Since I'm in full rant mode now, I'll close out with a few quotes that come to mind:
Obama:
"Change will not come if we wait for some other person or some other time. We are the ones we've been waiting for. We are the change that we seek."
Yes, that's an updated version of Mohandas Gandhi's "Be the change (that you want to see in the world)."
---------
NOFX: (this is a punk version of "First They Came"):
First they put away the dealers, keep our kids safe and off the street. Then they put away the prostitutes, keep married men cloistered at home. Then they shooed away the bums, then they beat and bashed the queers, turned away asylum-seekers, fed us suspicions and fears. We didn’t raise our voice, we didn’t make a fuss. It’s funny there was no one left to notice when they came for us.
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chrisco (me):
Stand up for each other people, even if it's at cost to you, maybe even especially if it is a cost to you. This I do know the name of: "altruistic punishment." Lots of info on the web about that. One blog that comes to mind is Christopher Allen's "Life With Alacrity" -- see http://www.lifewithalacrity.com/2005/03/dunbar_altruist.html.
The ideal outcome (for a MindJet hater) is to chew up as much time/energy of MindJet's (and as little of Chris's ideally) and THEN do the chargeback anyway.
I don't have that kind of time, so I'd fire off the minimum response to the company, then declare to my issuing bank that I was "unable to resolve it" with the company, get my chargeback and move on, but I do think that Chris's heart is in the right place here.
2. You have already tried to resolve the matter, and according to your own post, you have reached the point where you qualify for the dispute resolution protection offered by Mastercard. So why are you bringing this up?
2) I'm not sure what "this" you're referring to, but we'll let it go. Regarding credit card dispute resolution process, I'm not following you on that either, but we'll let that go too. Regarding this MindJet incident, as of 60 minutes ago, the company has come to its senses :)
PS: I just noticed that the tagline of your company is "People are talking about your brand. Are you listening?"
For now, please email me (nik at tc) if you do see these ads popup, we dislike them as much, if not more, than the readers do.
We ran offers like this back in 2005 for a very short period of time at HOTorNOT, that is until we realized what was going on. In a nutshell, the offers that monetize the best are the ones that scam/trick users. Sure we had netflix ads show up, and clearly those do convert to some degree, but i’m pretty sure most of the money ended up getting our users hooked into auto-recurring SMS subscriptions for horoscopes and stuff. When I hear people defending their directory of deals by saying Netflix is in there, i am reminded of how hotel pay-per-view has non-pornographic movies. Sure it gives them good cover, but we all know where the money is made.
In the end, we decided to turn the offers off. Quite frankly, the offers made us feel dirty, and pretty much on the same level as spammers. For us, the money just wasn’t worth it. On top of that, we relied on our goodwill with users and focused on growing by having a product and company that our users liked. Our sense was that using scammy offers would make good money in the short run, but would destroy our userbase in the end. Perhaps apps on facebook don’t feel this pressure because facebook is so huge, and there are always new people to burn.
It doesn't mean her company isn't treading on the edge of the fb guidelines, but she basically said that when push comes to shove and enough people complain, fb will do what's right by it's users even if it means losing the short-term ad revenue.
Ultimately, the health and trust-worthiness of its platform is paramount to fb ever capitalizing on its astronomical valuation.
Kleiner Perkins, Foundry Group, Union Square Ventures, Peter Thiel's Clarium Capital, more...
That said, writing to the VCs might indeed be an interesting strategy for handling ethically iffy startups. In fact, probably the most effective I can think of offhand. I'd just strongly recommend a polite "Please look at what this company in your portfolio is doing... I respect your group and I know you'll want to talk to them about this", not a "You! You're to blame! Damn profiteering bastards!"
That is my best hypothesis. Who has obsessed more about the cancers of human behaviors than Thiel and his circle? He seems like a person who would feed cancer now if he projected his culpability as minimizing E(cancer).
I don't know Peter Thiel; this is what I think from his writing and his past history. PayPal was originally the "new world currency." There is an old PayPal sticker on the pool table that says "PayPal: New World Currency" in Molly's Tavern in Mountain View. I think Peter Thiel and Max Levchin meant that literally... but, then their investors intervened to secure a safer cash exit.
What do you do with your life when almost succeed to make an actual New World Currency... but then people you trusted, they sell you out for millions of the currency that you convinced yourself was a corrupt illusion?
As a user, though, it's really annoying to keep running up against the same things in every single game out there. Want more acres of land? A bigger cafe? Better weapons in Spymaster? The very omnipresence of 'give us your mobile number/credit card and we'll abuse terribly small print to charge you money for things you don't want' is making them almost acceptable, because people are used to seeing them.
How does that even work? I think in Germany to start such a subscription, one would have to send a SMS to a specific number. Sounds as if in the US there are other ways?
Or is it simply that a phone number equals a bank account? A company could do the same if it could just get a person's bank account number, and just start deducting money?
To which they replied, "No problem sir, most people don't even know we offer that service."
Obviously the phone company gets a cut and for that reason are happy to act at middlemen.
One would think that an honest broker would require you to opt in to the system, rather than merely providing a virtually unknown opt out option.
Facebook is doing the same thing as the telcos, for their cut.
The situation in the U.S. is a holdover from the heyday of 1-900 phone numbers and phone-based home shopping, where customers genuinely wanted to be able to purchase things from a vendor over the phone.
Credit cards weren't quite en vogue, and provided a stopping point where the customer could have a chance to bail. The phone company was more than happy to get some revenue off of a service that both the vendors and consumers genuinely wanted, but they didn't really think the details through.
Nor did they expect that cheap internet and mobile phones would magnify a non-optimal payment system into a massive factory for scams.
The legal 'opt-in' step that the scammer claims gives them the right to bill you, is the 'enter your phone number for an SMS' step.
The opt-in probably won't be enough to satisfy the watchdog organisations that overlook this kind of stuff (ofcom in the UK for example) but it will be enough to broadside a legal complaint of simple fraud (ie, police involvement), and thus send the complaint to the watchdog authority...
The reason they do this is, if they can avoid the police shutting them down with a 'simple' investigation, then they get months upon months as someone like ofcom investigate, and during that time they can rack up the profit, then 'run' (declare bankrupcy and hide the profit) when the watchdog authority appears to be about ready to issue a fine.
(IANAL either, but have worked in the premium SMS industry, and seen this kind of 'ofcom-stalling' trick)
This is a PC World article on the subject from 2007. http://www.pcworld.com/article/129285/mystery_cell_phone_cha...
Credit card companies and telcos should get their act together and stop this. No more handling your wallet to the vendors.
I can see people paying 1 USD to earn 100 Virtual Coins, but they should be made aware that it's a 1 way route. I also think having offers/surveys for users is OK to earn Virtual currency, but as long as it's made clear enough to them that they are getting themselves into a recurring charge of $10.99/mo.
My nanny (a very nice, intelligent woman, but naive about such things) wound up with a $500 cell phone bill last month after falling for a bunch of scams in a single week.
However I do think that was a lucky experience; I saw something I wanted to try out, got it and got a freebie in the process. Win win.
I liked the follow up Techcrunch post where the Hot or Not guy is quoted as saying that the idea isnt in itself a bad one (affiliate sign ups) - just that the industry has slid the wrong way. Im sure he's correct; It worked for me and it can work for others too. But Im guessing that the number of times it is easier to just scam people is higher.
Good on Arrington for having a good public bitch about this.
Those ads aren't the cash cows--they're small, extreme and unethical elements that have slipped through the cracks of the application ecosystem. If you're going after them, you might as well go after Google for allowing Acai Berry ads to be shown on Google Adsense.
Still, without getting hung up on the verbiage, I agree that it's unfortunate that they're trouncing all over the other developers who won't partake in these tactics.
HUGE cognitive dissonance between sentences one and two there, man. When the only accurate way to describe something is "exploitative," step back and realize that something's rotten.
If something isn't quite a scam, it's not a scam. That said, there's definitely room to contest the notion that this isn't one.
Scam: - dishonest scheme: a scheme for making money by dishonest means - trick somebody: to obtain money or other goods from somebody by dishonest means
I was contending that I felt like the tactics being used in these games were shady and questionable? Yes. Dishonest? No.
However, as I pointed out above, I've changed my tune a little bit after delving deeper into the article and the HN comments. Without question, I should've done that before commenting in the first place.