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Another case for the FTC: LagunaWave swindled, and is apparently still swindling

This past January, while at CES, I discovered a neat little product called Chatterbug (from Lagunawave). In this day an age where complexity seems to be par for the course, Chatterbug was a return to simplicity.

This past January, while at CES, I discovered a neat little product called Chatterbug (from Lagunawave). In this day an age where complexity seems to be par for the course, Chatterbug was a return to simplicity. For $20, you purchased a device that you connected to your plain old telephone line and then for another $10 per month, you could make an unlimited number of long distance calls to the US and Canada. Under the hood, Voice-over-IP was at work. But the extraordinary thing about Chatterbug was how it delivered the cost benefit of VoIP without having to have a dedicated IP connection (eg: Cable or DSL). 

Now, according to one of ZDNet's readers who, based on my coverage, went out and acquired a Chatterbug (and subsequently subscribed to the $10 per month service), the service no longer works. But to make matters worse, Lagunawave continued to charge its customers' credit cards the $10 monthly service fee. As of the posting of this blog, virtually every option on the company's phone system says the company is experiencing technical difficulties and cannot commit to timeframe in which its service will be restored. 

Initially, according to a series of blog posts (here, here and here) from one customer who did a fair amount of personal detective work to track down the company's founder (Sean Ryan), the company eventually provided a means for deactivating the automatic charging that was taking place (the ZDNet reader who contacted me simply got his credit card company to reverse the charges and prevent future ones).  But there are many things wrong with this picture. Why, for example, were customers the ones who needed to take initial action to fix this problem? The charges should have stopped immediately and customers should have been reimbursed for loss of service. Secondly, why is there still no indication on the company's Web site -- even its customer support pages -- that something is gravely amiss.  Why is it that K-Mart is still allowing it's brand name to be associated with this apparently defunct outfit? Why is it that the company's online ordering system is still taking orders? As the aforementioned customer/blogger asked, why didn't any emails go out to all existing customers immediately (apparently, one finally did) and why doesn't the company's recorded phone message provide more complete details?

According to a comment on one very detailed thread, the service is about to be restored. But I'd run and run fast. Based on what has happened so far, this doesn't appear to be an outfit that you want your credit card to be intertwined with (nor should K-Mart want its brand intertwined with it either).

My final question? While the matter has apparently caught the attention of the Tuscon chapter of the Better Business Bureau, where's the FTC and the Arizona Attorney General's office on this (at least one person, according to the aforelinked thread, notified the AG)? 

Fool me once, shame on you. Fool me twice, shame on me.  Like I said. Run and run fast. Lastly, I'm now sorry that I even spotted the company and wrote about them.