Better Business Bureau receives official response from Butterfly Labs

[Xian01]

From: Dave McClain

August 23,2013
To:Lauren English
BBB Complaint lD: 9xxxxxxx

Pre-ordered products are non-refundable as is clearly stated at the time of purchase. The reason for this is that pre-order funds are used in the build process which makes it impractical to reverse. It's also been observed that some small number of customers have placed orders as part of a Bitcoin price hedging strategy which involves multiple requests to cancel and then re-instate their orders as market conditions change. This has created an enormous customer service burden which is resolved lry enforcing the all sales final policy.

Some customers have asked why we've given order cancellation refunds to others, but they can't get one. The answer is that we had opted to process order cancellation requests during our long product development phase as a courtesy to those who endured the stress of the unknown. However, once full production began, a notice was sent out advising that orders would be shipped as produced according to the order queue and that if anyone was unwilling to endure the wait, they had a final opportunity to cancel. Customers were required to positively confirm their desire to remain in the order queue and accept the order terms. Pre-Order terms for new orders were updated on the website on April 1, 2013. The terms state, "l accept the terms of the sale and understand that all sales are final and there is a backlog of orders and production & delivery of my order rnay take 2 months or longer."

We operate under the US Federal Trade Commission's (FTC) business guide for mail or telephone ordered merchandise. The relevant guideline suggests that if no delivery terms are stated or agreed lo, then 30 days should be assumed. ln our case, we've gone to great length to ensure there is no ambiguity. Customers are/were notified of the back order situation, the inability to cancel their order and the multi month rarait to be expected.

Here is the relevant FTC guideline text:
"when you advertise merchandise, you must have a reasonable basis for staiing or implying that you can ship within a certain time. lf you
make no shipment statement, you must have a reasonable basis for believing that you can ship within 30 days."

We are are working to fulfill our current order backlog as soon as possible. Our current estimate is by September 30 we should have most of our order backlog fulfilled. Your orders should ship in advance of that date.

With appreciation,

Paul Scholes
Butterfly Labs, lnc.

[gbx]

Man, that's some high quality distortion of truth.

The Rule requires that when you advertise merchandise, you must have a reasonable basis for stating or implying that you can ship within a certain time. If you make no shipment statement, you must have a reasonable basis for believing that you can ship within 30 days. That is why direct marketers sometimes call this the "30-day Rule."

If, after taking the customer’s order, you learn that you cannot ship within the time you stated or within 30 days, you must seek the customer’s consent to the delayed shipment. If you cannot obtain the customer’s consent to the delay -- either because it is not a situation in which you are permitted to treat the customer’s silence as consent and the customer has not expressly consented to the delay, or because the customer has expressly refused to consent -- you must, without being asked, promptly refund all the money the customer paid you for the unshipped merchandise.

Source:  well.. just google it.

Last I checked, they said they would ship by last December.  Not sure what this complaint is in reference to; I assume it's a later purchase?

[Dalkore]

Pre-ordered products are non-refundable as is clearly stated at the time of purchase. The reason for this is that pre-order funds are used in the build process which makes it impractical to reverse.

[Flying Hellfish]

Man, that's some high quality distortion of truth.

The Rule requires that when you advertise merchandise, you must have a reasonable basis for stating or implying that you can ship within a certain time. If you make no shipment statement, you must have a reasonable basis for believing that you can ship within 30 days. That is why direct marketers sometimes call this the "30-day Rule."

If, after taking the customer’s order, you learn that you cannot ship within the time you stated or within 30 days, you must seek the customer’s consent to the delayed shipment. If you cannot obtain the customer’s consent to the delay -- either because it is not a situation in which you are permitted to treat the customer’s silence as consent and the customer has not expressly consented to the delay, or because the customer has expressly refused to consent -- you must, without being asked, promptly refund all the money the customer paid you for the unshipped merchandise.

Source:  well.. just google it.

Last I checked, they said they would ship by last December.  Not sure what this complaint is in reference to; I assume it's a later purchase?

You guys should read the rule further.  BFL has received customer agreement to an "indefinite delay".  When you purchase a BFL product you agree to wait 2 months or more.  According to the mail order rule this is what a company must do if they ask for and receive an indefinite delay.  I've pointed this out in a number of threads and people seem to ignore it.

Not only must they offer cancellations/refunds they must provide the client a statement that they have the right to cancel the order any time until the product ships.  So BFL is not only doing the opposite of what they are supposed to, they are also further breaking the mail order rule by telling the client no refunds are possible.  They are telling the client the exact opposite of what the FTC tells them they must tell the client.

•a statement that, if the customer agrees to the indefinite delay, the customer may cancel the order any time until you ship.

http://business.ftc.gov/documents/bus02-business-guide-mail-and-telephone-order-merchandise-rule

It is irrelevant if or what they used the pre-order money for, it is also irrelevant what that they claim in their ToS about all sales are final, they have a legal obligation to refund customers that ask for one full stop.  Anything else is clearly against FTC regulations.

People around Deadwood need to realize the difference between an investor and a customer because the law does not allow for a blend of the two just because there is some wording on a webpage!

[lajz99]

I received the same canned bullshit letter from my BBB complaint.

If anyone wants to know how I received a refund via PayPal please feel free to shoot me a message.

[GigaWave]

Pre-ordered products are non-refundable as is clearly stated at the time of purchase. The reason for this is that pre-order funds are used in the build process which makes it impractical to reverse.

LLLIIESSSSSS, they haven't used any of that money! They gave their word!    .....sarcasm.. except for the last part. They really said that.

[gbx]

Man, that's some high quality distortion of truth.

The Rule requires that when you advertise merchandise, you must have a reasonable basis for stating or implying that you can ship within a certain time. If you make no shipment statement, you must have a reasonable basis for believing that you can ship within 30 days. That is why direct marketers sometimes call this the "30-day Rule."

If, after taking the customer’s order, you learn that you cannot ship within the time you stated or within 30 days, you must seek the customer’s consent to the delayed shipment. If you cannot obtain the customer’s consent to the delay -- either because it is not a situation in which you are permitted to treat the customer’s silence as consent and the customer has not expressly consented to the delay, or because the customer has expressly refused to consent -- you must, without being asked, promptly refund all the money the customer paid you for the unshipped merchandise.

Source:  well.. just google it.

Last I checked, they said they would ship by last December.  Not sure what this complaint is in reference to; I assume it's a later purchase?

You guys should read the rule further.  BFL has received customer agreement to an "indefinite delay".  When you purchase a BFL product you agree to wait 2 months or more.  According to the mail order rule this is what a company must do if they ask for and receive an indefinite delay.  I've pointed this out in a number of threads and people seem to ignore it.

Not only must they offer cancellations/refunds they must provide the client a statement that they have the right to cancel the order any time until the product ships.  So BFL is not only doing the opposite of what they are supposed to, they are also further breaking the mail order rule by telling the client no refunds are possible.  They are telling the client the exact opposite of what the FTC tells them they must tell the client.

•a statement that, if the customer agrees to the indefinite delay, the customer may cancel the order any time until you ship.

http://business.ftc.gov/documents/bus02-business-guide-mail-and-telephone-order-merchandise-rule

It is irrelevant if or what they used the pre-order money for, it is also irrelevant what that they claim in their ToS about all sales are final, they have a legal obligation to refund customers that ask for one full stop.  Anything else is clearly against FTC regulations.

People around Deadwood need to realize the difference between an investor and a customer because the law does not allow for a blend of the two just because there is some wording on a webpage!

Good catch.

^{(B) The seller has received from the buyer within thirty (30) days of said applicable time, a response specifically consenting to said shipping delay. Where the seller informs the buyer that it is unable to make any representation regarding the length of the delay, the buyer shall be expressly informed that, should the buyer consent to an indefinite delay, the buyer will have a continuing right to cancel the buyer's order at any time after the applicable time set forth in paragraph (a)(1) of this section by so notifying the seller prior to actual shipment.}

[btceic]

I'll point out the most important rule,

When You Must Cancel an Order

You must cancel an order and provide a prompt refund when:

• the customer exercises any option to cancel before you ship the merchandise;
• the customer does not respond to your first notice of a definite revised shipment date of 30 days or less and you have not shipped the merchandise or received the customer’s consent to a further delay by the definite revised shipment date;
• the customer does not respond to your notice of a definite revised shipment date of more than 30 days (or your notice that you are unable to provide a definite revised shipment date) and you have not shipped the merchandise within 30 days of the original shipment date;
• the customer consents to a definite delay and you have not shipped or obtained the customer’s consent to any additional delay by the shipment time the customer consented to;
• you have not shipped or provided the required delay or renewed option notices on time; or
• you determine that you will never be able to ship the merchandise.

[Fiyasko]

I'll point out the most important rule,

When You Must Cancel an Order

You must cancel an order and provide a prompt refund when:

• the customer exercises any option to cancel before you ship the merchandise;
• the customer does not respond to your first notice of a definite revised shipment date of 30 days or less and you have not shipped the merchandise or received the customer’s consent to a further delay by the definite revised shipment date;
• the customer does not respond to your notice of a definite revised shipment date of more than 30 days (or your notice that you are unable to provide a definite revised shipment date) and you have not shipped the merchandise within 30 days of the original shipment date;
• the customer consents to a definite delay and you have not shipped or obtained the customer’s consent to any additional delay by the shipment time the customer consented to;
• you have not shipped or provided the required delay or renewed option notices on time; or
• you determine that you will never be able to ship the merchandise.

Wow, Just look at that, 5/6 FTC rules are being Broken/Ignored by BFL