Is Butterfly Labs breaking the law?

[Viceroy]

Let's run this up the flagpole.  Is Butterfly labs breaking any known American federal or state laws?  


I'm wondering about:

Technology Export Laws
Mail or mail order fraud (Like the ?founder? appears to have plead guilty to)
Uniform Commercial Code
Money printing machine laws
FCC (https://bitcointalk.org/index.php?topic=110805.msg2622757#msg2622757)
FTC (see post #3 below)
other


This is in response to the long running thread here:

https://bitcointalk.org/index.php?topic=110805.0

[1714145190]

1714145190

[1714145190]

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[Phinnaeus Gage]

FTC also comes to mind.

I've also read about RICO, but not versed in it.

[Flying Hellfish]

Let's run this up the flagpole.  Is Butterfly labs breaking any known American federal or state laws?  


I'm wondering about:

Technology Export Laws
Mail or mail order fraud (Like the ?founder? appears to have plead guilty to)
Uniform Commercial Code
Money printing machine laws
FCC (https://bitcointalk.org/index.php?topic=110805.msg2622757#msg2622757)
other


This is in response to the long running thread here:

https://bitcointalk.org/index.php?topic=110805.0

Since they have stopped issuing refunds it certainly appears to me (IANAL) they are at least breaking FTC regulations.  It would seem that UNTIL the product is physically shipped a customer has the right to cancel their order (for ANY reason) and the company MUST issue a prompt refund. 

Below is quoted from the link at the FTC site (bolded is mine)

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.


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

[Viceroy]

Direct link to FTC compliant form:

https://www.ftccomplaintassistant.gov/FTC_Wizard.aspx?Lang=en





More information from the link above:

WHERE TO GO FOR HELP

For more information about the Mail or Telephone Order Merchandise Rule, call the Federal Trade Commission toll-free: 1-877-FTC-HELP; write: Federal Trade Commission, Consumer Response Center, 600 Pennsylvania Avenue, N.W., Washington, DC 20580; or visit: www.ftc.gov.

You also may want to contact relevant trade associations, such as the Direct Marketing Association. Contact the DMA’s Washington, DC office at: 202-955-5030; write: 1111 19th Street, N.W., Suite 1100, Washington, DC 20036-3603; or visit: www.the-dma.org.

Your local U.S. Postal Service or consumer protection agency may offer additional assistance. State and local governments also may have requirements with which you must comply. You should consult appropriate state agencies for information about laws that affect your business.




For More Information

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

[BalkanBoy]

Since they have stopped issuing refunds it certainly appears to me (IANAL) they are at least breaking FTC regulations.

Could you provide us with names of people who have ordered, paid, asked for a refund and did not get it? I've ordered a unit from BFL so this keenly interests me.

[Viceroy]

Their website states that they do not offer refunds.

[Flying Hellfish]

Since they have stopped issuing refunds it certainly appears to me (IANAL) they are at least breaking FTC regulations.

Could you provide us with names of people who have ordered, paid, asked for a refund and did not get it? I've ordered a unit from BFL so this keenly interests me.

I asked for a refund today and this was the response i received :

 ________________________
Hi,

As stated on the order form, all sales are final. Unfortunately, we cannot give you a refund. We truly do appreciate your business.

Best Wishes,
Abbey
BF Labs, Inc.
 ___________________



 It was for a Jalapenos 5GH (no upgrade) ordered June 3 2013. (#100063809‏).


This is reportedly and email received from BFL by a customer who wanted a refund.

https://forums.butterflylabs.com/bfl-forum-miscellaneous/3521-bfl-doesnt-refund-anymore.html

The entire thread if it interest you.

There are others (I'm not that interested to dig them up tbh) but from what I have read recently this seems to be the trend (which could be a huge red flag and possibly against FTC regulations if I read them correctly).

[Flying Hellfish]

Their website states that they do not offer refunds.

The website has said that for a long time however from what I have seen they have always cancelled an order and refunded them when asked to (even sometimes when not asked to LOL), that is up until recently.

IMO BFL is playing a very dangerous game, time will tell though, I have my popcorn (and fortunately no skin in the BFL game!).

[cryptoanarchist]

I thought fraud was part of the common law. They're certainly guilty of that.

[Phinnaeus Gage]

I did not request a refund. If you refund me, I expect the full amount of BTC I paid to be refunded. If you are able to do this I will gladly take my business elsewhere, because believe it or not you have competition now

You'll get the full amount you paid in USD, since that's how our products are priced.  

As a point of fact, you did request a refund, let me quote you:

but your business operations and ethic are both unacceptable.

You find them unacceptable, I understand.  We will cut ties and move on and you no longer have to deal with the unacceptable (to you) business nature.  We do not want to force you into a position where you are must deal with an unacceptable situation, so we are removing that roadblock from your happiness.  I'm done here, your refund will be processed by COB tomorrow.

As seen above, BFL (Butterfly Labs Inc.), owned my Sonny Vleisides, was giving refunds as late as June 19, 2013.

Think I will add this information to what my attorney general has already got..... He did refund my money but it was only cause I got the Gov involved.

You're lucky. Their official policy is pre-orders are "non-refundable".

No luck involved.  Email office@butterflylabs.com and we will happily refund your order at any time.  It's always been that way.

We've had, hmm, 6 order cancellations in the past 3 months.  Each time, the person emailed and we cancelled the order and refunded the money immediately.  BitcoinINV never once asked for a refund.

So, if a customer read the above, and up to two weeks ago read that people were getting refunds, he felt safe to order. Due to whatever circumstances, said customer asked for a refund but was denied.

What the fuck has changed, BFL?

[goxed]

Butterfly Labs, El Monte Street, Leawood, KS  

Probably one of the choices should be Kansas laws.

[Viceroy]

Butterfly Labs, El Monte Street, Leawood, KS  

Probably one of the choices should be Kansas laws.

OOOPS. I seem to have goxed it all up.   Fixed.

[Nagle]

Looks like a straightforward violation of the FTC's Mail Order Rule. They can take the position that orders are "final" only if they ship the item ordered within 30 days. Once they fail to deliver, they have to give refunds. They do not have the option of keeping the money and not delivering product.

In the early days of the dot-com era, many small companies got into trouble for this. Their "online stores" would take every order that came in, without checking inventory first. The FTC clamped down on that. Now, almost everybody who sells online has the order system connected to the inventory system, so the order is rejected if it can't be filled. That fixed the problem.

[Viceroy]

Added European Law as an option to the poll.  Should that read "European Union" law?  Excuse my ignorance.



"BFL ASIC seized by EU , european & german Customs"
https://bitcointalk.org/index.php?topic=248406.0

[iANDROID]

To clarify the EU position, I send an email to the Swiss Customs.

[Viceroy]

To clarify the EU position, I send an email to the Swiss Customs.

Excellent, thank you.  Please do report your findings here.

[delaria]

Self-certification

Depending on the level of risk of the product, the CE marking is affixed to a product by the manufacturer or authorized representative who decides whether the product meets all the CE marking requirements. If a product has minimal risk, it can be self-certified where manufacturers a Declaration of Conformity and affixes the CE marking to their own product. Manufacturer then must do several things:
1. Decide whether the product needs to have a CE marking and if the product applies to more than one directive it needs to comply with all of them.
2. Choose the conformity assessment procedure from the modules called out by the directive for the product. There are several modules available for the Conformity Assessment Procedures as listed below:
Module A – Internal production control.
Module B – EC type-examination.
Module C – Conformity to type.
Module D – Production quality assurance.
Module E – Product quality assurance.
Module F – Product verification.
Module G – Unit verification.
Module H – Full quality assurance.
These will often ask questions about the product to classify the level of risk and then refer to the "Conformity Assessment Procedures" chart. This shows all the acceptable options available to a manufacturer to certify the product and affix the CE marking.

[continued ...]


Legal implications

There are mechanisms in place to ensure that the CE marking is put on products correctly. Controlling products bearing CE marking is the responsibility of public authorities in Member States, in cooperation with the European Commission. Citizens may contact national market surveillance authorities if the misuse of the CE marking is suspected or if a product's safety is questioned.
The procedures, measures and sanctions applying to counterfeiting of the CE marking vary according to the respective Member State's national administrative and penal law. Depending on the seriousness of the crime, economic operators may be liable to a fine and in some circumstances, imprisonment. However, if the product is not regarded as an imminent safety risk, the manufacturer may be given an opportunity to ensure that the product is in conformity to the applicable legislation before it is obliged to take the product off the market

Source : http://en.wikipedia.org/wiki/CE_marking

[Flying Hellfish]

It also appears as though BFL has shipped Jalapenos with no UL cert on the device OR the power brick.  Can this company do anything legitimately?

There are lot jala box and labes pictures you can check if they got CE

The only CE logo that came with my US-delivered Jalapeno is the one that appears on the power supply.

[Flying Hellfish]

Is UL certification required?  There are 20 similar organizations  (ie. ETL) but are they required? 

Not 100% required but chances are pretty high IMO they are shipping to a municipality that has laws, regulations or codes.  It's on everything that plugs into the wall for a reason.

Do I need to have the UL Mark on my product in the United States? Is there a law stating that my product should have a UL Mark? Does our product require UL testing?


Manufacturers submit products to UL for testing and safety certification on a voluntary basis. There are no laws specifying that a UL Mark must be used. However, in the United States there are many municipalities that have laws, codes or regulations which require a product to be tested by a nationally recognized testing laboratory before it can be sold in their area. UL is the largest and oldest nationally recognized testing laboratory in the United States. UL does not, however, maintain a list of the jurisdictions having such regulations.


http://www.ul.com/global/eng/pages/corporate/contactus/faq/general/background/

[Viceroy]

BFL refusing to refund, date July 4, 2013 and indicating people may be contacting the FTC

https://bitcointalk.org/index.php?topic=249396.msg2657249#msg2657249

https://forums.butterflylabs.com/pre-sales-questions/3675-refund-policy.html

IMHO being open on July 4th is un-American