PROOF: BFL used ALL pre-order moneys for development of their Bitcoin Miners!

[MPOE-PR]

Will anyone trust BFL anymore, even with a different product range?

Best thing for them is to pack it in or sell the company off to some rich idiot.

Nobody who wasn't a consummate shill (Luke, Giga, etc) "trusted" them after the box-of-fans incident at that convention thingie.

[MrTeal]

Phinneaus, did you notice that the page you linked was for the FPGA miners from two years ago, and has nothing to do with the ASIC preorder?

[Flying Hellfish]

Phinneaus, did you notice that the page you linked was for the FPGA miners from two years ago, and has nothing to do with the ASIC preorder?

Question: where are you reading anything about FPGA?
Answer: Right near the top of the link is "Pre-Order your BitForce SHA256 Single by filling out the form below."

FTFY

[Phinnaeus Gage]

Phinneaus, did you notice that the page you linked was for the FPGA miners from two years ago, and has nothing to do with the ASIC preorder?

Damn, MrTeal, when you're right, you're right. I take this post to mean that the premise of this thread in now null and void since I have yet to offer up proof that BFL does in fact had, and continues to use pre-order moneys to finance their operation.

Boy, what I would give to find such proof penned by anybody at Butterfly Labs, but what are the odds of me stumbling across such proof when BF Labs Inc. is so much more cleverer than I?

Perhaps, if I pray. Heavenly Father, Jehovah, please... Damn, that fucker's quick!

http://www.butterflylabs.com/faq/

Can I get a refund on my order?

While we reserve the right to handle refund requests on a case by case basis, 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-enstate their orders as market conditions change.  This has created an enormous customer service burden which is resolved by enforcing the all sales final policy.

Some customers have asked why we've given order cancelation refunds to others, but they can't get one.  The answer is that we had opted to process order cancelation 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, "I 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 may take 2 months or longer."

As a Wyoming Corporation, we operate under the US Federal Trade Commission's business guide for mail or telephone ordered merchandise.  The relevant guideline suggests that if no delivery terms are stated or agreed to, then 30 days should be assumed.  In 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 wait to be expected.
Here is the relevant FTC guideline text:

"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."

To be clear, MrTeal, the above was penned at some point after the Luke Unit was pseudo-delivered on April Fools Day, 2013. Not in eons ago in 2011.

Therefore, each and every time that Josh or anybody else at BFL claimed that no pre-order moneys were used in the development of their miners, they, how can say this politely?, FUCKIN' LIED.

[Phinnaeus Gage]

They can and may refund your order simply to keep the good PR going, but at any moment they can refuse to do so legally thanks to company policy.

Be warned, they have no requirement to deliver you a product.

Shocking!

ALL CAPS ATTENTION EVERYONE!  IT IS TIME FOR THE ALL CAPS POST!  HOLY SHIT!

As was previously posted in a thread that the original poster has read, the non-refundable policy in the FAQ section is simply CYA language.  Also, please READ the FAQ referenced before posting a troll thread.

BFL has, and continues to refund pre-orders to anyone who asks- no matter what the reason.  Yes, there is a matter of trust and confidence that one has to have in any new thing, but butterfly labs has been nothing if not the most honestly hard working group of people throughout the transition from their FPGA line to this new ASIC line of devices.

But even if you were to go by the actual posted text on the FAQ section of the BFL site,

Butterfly Labs, INC. is accepting pre-orders for ASIC based products, expected to begin shipping in late November or early December 2012. Your pre-order with payment confirms your place in line for delivery once we begin shipping. Payments made for pre-orders of ASIC based products now under development should be considered non-refundable until products begin shipping or 1 January 2013, whichever is earlier.

= still has a provision for latest shipping date where refunds are legally required on the part of BFL.

Oh, and they actually have the funding (not pre-order money) to develop this product, and are currently progressing in ways that I am sure will surprise us all.

Surprise, surprise, surprise!

[Phinnaeus Gage]

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

Why You Should Comply with the Rule

Merchants who violate the Rule can be sued by the FTC for injunctive relief, monetary civil penalties of up to $16,000 per violation (any time during the five years preceding the filing of the complaint), and consumer redress (any time during the three years preceding the filing of the complaint). When the mails are involved, the Postal Service also has authority to take action for problems such as non-delivery. State law enforcement agencies can take action for violating state consumer protection laws.

Apart from this, your failure to ship on time, or your failure to notify your customers promptly about delays and to obtain their consent to the delays, or your failure to make full and prompt refunds when your customers do not consent to delayed shipment, can adversely affect your business by discouraging repeat purchases. Accordingly, most businesses regard compliance with the Rule as simply good business practice.

Hot damn! Sonny Vleisides must love flirting with diaster.

I'm toying with the idea, if nobody beats me to it, of starting a thread to solicit sigs to petition the FTC to sue BFL. I'm sure they could use the $16,000 per violation in their coffers.

Who would love to see such a thread?

[Flying Hellfish]

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

Why You Should Comply with the Rule

Merchants who violate the Rule can be sued by the FTC for injunctive relief, monetary civil penalties of up to $16,000 per violation (any time during the five years preceding the filing of the complaint), and consumer redress (any time during the three years preceding the filing of the complaint). When the mails are involved, the Postal Service also has authority to take action for problems such as non-delivery. State law enforcement agencies can take action for violating state consumer protection laws.

Apart from this, your failure to ship on time, or your failure to notify your customers promptly about delays and to obtain their consent to the delays, or your failure to make full and prompt refunds when your customers do not consent to delayed shipment, can adversely affect your business by discouraging repeat purchases. Accordingly, most businesses regard compliance with the Rule as simply good business practice.

Hot damn! Sonny Vleisides must love flirting with diaster.

I'm toying with the idea, if nobody beats me to it, of starting a thread to solicit sigs to petition the FTC to sue BFL. I'm sure they could use the $16,000 per violation in their coffers.

Who would love to see such a thread?

I have quoted the mail order rule a lot on this forum, if BFL is not in violation of the rule I will suck a goats dick!

I have also pointed out several times that on BFL's on site they state as their shipping representation a time from of 2 months or MORE.  I would personally consider this an indefinite delay and the FTC is quite clear on what a company must do when obtaining an indefinite delay consent from the customer.

From the FTC mail order link above:
What Later Notices Must Say

If you cannot ship the merchandise by the definite revised shipment date included in your most recent delay option notice, before that date you must seek the consent of your customers to any further delay. You must do this by providing customers a "renewed" delay option notice. A renewed delay option notice is similar in many ways to the first delay option notice. One important difference: the customer’s silence may not be treated as a consent to delay.

A renewed delay option notice must include:
•a new definite revised shipment date or, if unknown, a statement that you are unable to provide any date;
•a statement that, if the customer chooses not to wait, the customer can cancel the order immediately and obtain a full and prompt refund;
•a statement that, unless you receive notice that the customer agrees to wait beyond the most recent definite revised shipment date and you have not shipped by then, the customer’s order automatically will be cancelled and a prompt refund will be provided; and
•some means for the customer to inform you at your expense (e.g., by providing a postage prepaid reply card or toll-free telephone number) whether the customer agrees to the delay or is canceling the order.
•the following information when you cannot provide a new definite revised shipping date:
•the reason for the delay, and
•a statement that, if the customer agrees to the indefinite delay, the customer may cancel the order any time until you ship.


I think the bolded is pretty important because if BFL is asking customer to agree to an indefinite delay than they must tell the customer that they may cancel the order ANY TIME before you ship.  They would obviously have to refund a cancelled order as well.

Anyone that thinks BFL is not stomping all over the mail order rule is very wrong, anyone that believes BF Labs spin of pre-orders, production has started, all sales are final blah blah blah bull shit and thinks refusing is refunds is legit is fucking delusional.   The only thing the FTC cares about is when the product shipped (and what representation the company made about shipping date).

Now whether or not the FTC decides to pursue this is entirely another matter, they do have limited resources (so to speak) and they do not pursue every case that comes across their "desks".

[MrTeal]

Phinneaus, did you notice that the page you linked was for the FPGA miners from two years ago, and has nothing to do with the ASIC preorder?

Damn, MrTeal, when you're right, you're right. I take this post to mean that the premise of this thread in now null and void since I have yet to offer up proof that BFL does in fact had, and continues to use pre-order moneys to finance their operation.

Boy, what I would give to find such proof penned by anybody at Butterfly Labs, but what are the odds of me stumbling across such proof when BF Labs Inc. is so much more cleverer than I?

Perhaps, if I pray. Heavenly Father, Jehovah, please... Damn, that fucker's quick!

http://www.butterflylabs.com/faq/

Can I get a refund on my order?

While we reserve the right to handle refund requests on a case by case basis, 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-enstate their orders as market conditions change.  This has created an enormous customer service burden which is resolved by enforcing the all sales final policy.

Some customers have asked why we've given order cancelation refunds to others, but they can't get one.  The answer is that we had opted to process order cancelation 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, "I 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 may take 2 months or longer."

As a Wyoming Corporation, we operate under the US Federal Trade Commission's business guide for mail or telephone ordered merchandise.  The relevant guideline suggests that if no delivery terms are stated or agreed to, then 30 days should be assumed.  In 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 wait to be expected.
Here is the relevant FTC guideline text:

"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."

To be clear, MrTeal, the above was penned at some point after the Luke Unit was pseudo-delivered on April Fools Day, 2013. Not in eons ago in 2011.

Therefore, each and every time that Josh or anybody else at BFL claimed that no pre-order moneys were used in the development of their miners, they, how can say this politely?, FUCKIN' LIED.

The development process is not the same as production. It's not ideal of course, but it's hardly uncommon that a company will use the customer's money to purchase the parts needed to complete the product prior to the product being delivered. Really, you're grasping at straws here. There's a big difference between using customer funds for development and using them for production. There's nothing to say BFL didn't use the pre-order money for development, but what you posted is a world away from being "proof".

[LostDutchman]

http://bflfraud.com/

[Stack]

There was a topic on the BFL forum on Sunday which was deleted by,presumably, Josh (as he was online and was Last Activity: Moderating according to his profile).

The topic was raising awarenesss that Kansas police were investigating BFL and contained information such as contact information for the detective in charge.
It was promptly deleted and the user (Angelito) was permanently banned.
Several users in the shoutbox noticed it was removed and the IRC room was also aware as Angelito (under the handle Captain_Atom) came into the room looking for BFL Staff.

I'm not a big fan of censorship, especially as:

a) The refusal of refunds is wrong and, in some countries, highly illegal,
b) Pretty sure its in contravention of the FTC rules on shipping for 30 days or refund (unless the customer is given specific shipping dates to which they agree),
c) If people want a refund, they should be given a refund simply for ethical reasons
d) They're abusing the 'No refunds once shipping has commenced' rule. That rule is used for when a company ship YOUR order, not any order. Even in the UK that would be illegal (you can receive a refund for upto 7 days after you've received the order).

This'd be a lot more useful if it included said contact information.

Here is the guy to contact who is gathering info on BFL crime

Leawood KS Police already have a file opened.

Contact this person who is heading up the investigation:

JohnF@leawood.org

Det. John Freeman   (913) 642-5555 X209

[spiral_mind]

I've heard of people still being able to cancel their order through PayPal. Until people are unable to do that I think calling BFL a scam might be premature. They've shipped quite a few units and the production seems to be getting faster (though they are admittedly far behind). Still the difficulty hasn't been rising too fast in the meantime so I think there's a good chance that many people will still get their orders in time to make money (as long as they didn't buy at double price).

The FTC rules are definitely on the side of the consumer here. I see nothing wrong with BFL taking a long time to ship unless they really stop giving refunds. With PayPal acting as the intermediary I think they are going to be forced to do so as long as the customer payed through PayPal. That's because their terms of service state that you aren't even technically allowed to sell a pre-order without being able to ship a product.

[Stack]

I've heard of people still being able to cancel their order through PayPal. Until people are unable to do that I think calling BFL a scam might be premature. They've shipped quite a few units and the production seems to be getting faster (though they are admittedly far behind). Still the difficulty hasn't been rising too fast in the meantime so I think there's a good chance that many people will still get their orders in time to make money (as long as they didn't buy at double price).

The FTC rules are definitely on the side of the consumer here. I see nothing wrong with BFL taking a long time to ship unless they really stop giving refunds. With PayPal acting as the intermediary I think they are going to be forced to do so as long as the customer payed through PayPal. That's because their terms of service state that you aren't even technically allowed to sell a pre-order without being able to ship a product.

Man.. what?

You *might* get a refund from PayPal after a long fraud dispute because PayPal forces the money transfer due to the fact that Butterfly Labs are denying refunds
There is a bloody HUGE difference...

They even updated their terms and conditions to state that no refunds will be honoured, ever.

Also.. needing to collect more pre-order money to fulfill previous orders. IS A SCAM. It's a pyramid-like system. The trickle of units going out IS THE BAIT YOU ARE FALLING FOR

[LostDutchman]

FYI,for those of you interested in contacting local law enforcement regarding BFL, Butterfly Labs is actually located in Overland Park, Kansas but because of a very old and outdated glitch in the United State Postal Service and a long standing local tradition, still has a Leawood, Kansas mailing address.

http://www.opkansas.org/city-government/police-department/

913-895-6300

The Kansas Attorney General's Office of Consumer Protection can be found here:

http://ag.ks.gov/consumer-protection

" Protecting Kansas consumers from scams, telemarketing fraud and other deceptive practices is a priority for our office. If you’ve become the victim of a scammer or con artist, we are here to help."

Johnson County, Kansas Small Claims Court

http://courts.jocogov.org/dc_smallclaims.aspx

" Small claims cases are heard on Monday at 2:00 p.m. and Tuesdays at 9:00 a.m. in Room 107 of the Johnson County Courthouse. Cases for the recovery of money or property up to a jurisdictional limit of $4,000 may be filed in the Small Claims Division. Attorneys are not allowed to represent parties in small claims proceedings prior to the entry of judgment. Small claims cases are generally heard by District Magistrate Judge Linda Trigg.

The small claims division of the Court Clerk's Office is located in the southwest corner of the 2nd floor of the Johnson County Courthouse.  It is open from 8:00 a.m. to 5:00 p.m. Monday through Friday."

[Threader]

I've heard of people still being able to cancel their order through PayPal. Until people are unable to do that I think calling BFL a scam might be premature. They've shipped quite a few units and the production seems to be getting faster (though they are admittedly far behind). Still the difficulty hasn't been rising too fast in the meantime so I think there's a good chance that many people will still get their orders in time to make money (as long as they didn't buy at double price).

The FTC rules are definitely on the side of the consumer here. I see nothing wrong with BFL taking a long time to ship unless they really stop giving refunds. With PayPal acting as the intermediary I think they are going to be forced to do so as long as the customer payed through PayPal. That's because their terms of service state that you aren't even technically allowed to sell a pre-order without being able to ship a product.

Are you you kidding? Do you understand that many people are past the 45 day Paypal dispute window. Also many like myself paid with bank funds through Paypal so no credit card chargeback recourse. I have been jumping through hoops to get Paypal too listen to me. So far not so good. Paypal have admitted to me that they have alot of client with complaints against BFL.

[Phinnaeus Gage]

I have quoted the mail order rule a lot on this forum, if BFL is not in violation of the rule I will suck a goats dick!

You wait till I'm done, bud! Ever since Maria left, I've learnt to love goat dick. <note goat is not capitalized, though they probably taste the same>

[Phinnaeus Gage]

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

Why You Should Comply with the Rule

Merchants who violate the Rule can be sued by the FTC for injunctive relief, monetary civil penalties of up to $16,000 per violation (any time during the five years preceding the filing of the complaint), and consumer redress (any time during the three years preceding the filing of the complaint). When the mails are involved, the Postal Service also has authority to take action for problems such as non-delivery. State law enforcement agencies can take action for violating state consumer protection laws.

Apart from this, your failure to ship on time, or your failure to notify your customers promptly about delays and to obtain their consent to the delays, or your failure to make full and prompt refunds when your customers do not consent to delayed shipment, can adversely affect your business by discouraging repeat purchases. Accordingly, most businesses regard compliance with the Rule as simply good business practice.

Hot damn! Sonny Vleisides must love flirting with diaster.

I'm toying with the idea, if nobody beats me to it, of starting a thread to solicit sigs to petition the FTC to sue BFL. I'm sure they could use the $16,000 per violation in their coffers.

Who would love to see such a thread?

I have quoted the mail order rule a lot on this forum, if BFL is not in violation of the rule I will suck a goats dick!

I have also pointed out several times that on BFL's on site they state as their shipping representation a time from of 2 months or MORE.  I would personally consider this an indefinite delay and the FTC is quite clear on what a company must do when obtaining an indefinite delay consent from the customer.

From the FTC mail order link above:
What Later Notices Must Say

If you cannot ship the merchandise by the definite revised shipment date included in your most recent delay option notice, before that date you must seek the consent of your customers to any further delay. You must do this by providing customers a "renewed" delay option notice. A renewed delay option notice is similar in many ways to the first delay option notice. One important difference: the customer’s silence may not be treated as a consent to delay.

A renewed delay option notice must include:
•a new definite revised shipment date or, if unknown, a statement that you are unable to provide any date;
•a statement that, if the customer chooses not to wait, the customer can cancel the order immediately and obtain a full and prompt refund;
•a statement that, unless you receive notice that the customer agrees to wait beyond the most recent definite revised shipment date and you have not shipped by then, the customer’s order automatically will be cancelled and a prompt refund will be provided; and
•some means for the customer to inform you at your expense (e.g., by providing a postage prepaid reply card or toll-free telephone number) whether the customer agrees to the delay or is canceling the order.
•the following information when you cannot provide a new definite revised shipping date:
•the reason for the delay, and
•a statement that, if the customer agrees to the indefinite delay, the customer may cancel the order any time until you ship.


I think the bolded is pretty important because if BFL is asking customer to agree to an indefinite delay than they must tell the customer that they may cancel the order ANY TIME before you ship.  They would obviously have to refund a cancelled order as well.

Anyone that thinks BFL is not stomping all over the mail order rule is very wrong, anyone that believes BF Labs spin of pre-orders, production has started, all sales are final blah blah blah bull shit and thinks refusing is refunds is legit is fucking delusional.   The only thing the FTC cares about is when the product shipped (and what representation the company made about shipping date).

Now whether or not the FTC decides to pursue this is entirely another matter, they do have limited resources (so to speak) and they do not pursue every case that comes across their "desks".

Sorry for the large font, but I misplaced my glasses. Please help me find that clause I highlighted in red above in the email below.

BFL Products Shipping Now
May 1, 2013


Dear Customer,

Shipping of our BitForce SC ASIC miners has begun!

You may have seen news reports of our ASIC miners in the wild and some of you may have already taken delivery.  It's all true.  We're finally shipping.  You will receive your order as we work through the shipping queue .

If you didn't know, you can check your order status on our website. Log in by clicking here. Use the same email and password you set up your account with.

If you don't have your password, use the Lost Password function to create a new one.


So what took so long?

This third generation of our SHA256 engine was a complex multi-year investment in bringing the latest semiconductor technology to bitcoin mining.

Developing a fully custom 65nm ASIC processor is not a casual undertaking. In fact, the new products have improved mining speed by a factor of 72. This much advancement doesn't come easy and it's fair to say that getting here has been eventful.

The key issue has been the engineering related to accommodating larger power draws than expected. A good example is the Jalapeno product. It was originally designed to be powered by USB but now consumes the power of a small light bulb (30w).

Consequently the power regulator, enclosure, airflow and PCB needed upgrading to suit. Although we are *very* aware of the undesirable dynamics of any delay, we were nonetheless obligated to make these updates in order to deliver a reliable product at the expected performance.  The same adjustments have been made with all products in the lineup.  You can see the adjusted product cases in our currently posted product lineup.  (The Mini Rig case will be double shipped to satisfy their orders which is why we've run out Mini Rig enclosure stock).
 
Final confirmation is required

Please be advised that due to the adjustments described above, we need your confirmation prior to release of your order into the final build queue and on to final delivery.  It may also be a good time to review your purchase altogether relative to the bitcoin market as this is the last opportunity to do so.  If your order is not confirmed, it will be canceled and your money will be refunded.
 
Thank you for your support and we wish you great satisfaction with your product!

[MPOE-PR]

Is BFL a member of the Bitcoin Scam Foundation? Have they been educating BFL/Inaba/etc on how exactly to scam better? Is Vessenes still holding every donator's fool's coins?

Very amused minds wish to know.

[Bicknellski]

Le Bumpty bump.

BFL = Shady.