MagicJack’s false promise of “no more bills”

Have you heard of MagicJack? It is a company that provides phone service via the Internet. You purchase a device that you plug into either your computer or your Internet router, treat and you can use it to make unlimited phone calls across the US and Canada for free. I’ve had MagicJack for a couple of years and I love their service. However, I was taken aback when I visited their website and saw the following two promises (see screenshot on right, taken today at about 4:30PM MDT):

  • “NOW GET PHONE SERVICE FOR LIFE – FREE PHONE CALLS WITH MAGICJACK PLUS”
  • “Never Pay a Phone Bill Again”

If you read those statements, you might infer that if you purchased a MagicJack device, you’d “never pay a phone bill again.” If you inferred that, you would be incorrect.

See, it turns out that there is an annual fee to use the device. Granted, the annual fee is small, compared to a regular phone line, but in my opinion, it is a bit disingenuous to claim that you will “never pay a phone bill again” when in fact, there is an annual fee to use the device.

I contacted their support chat to ask about the discrepancy. Here is how it went:

You are now chatting with ‘[MJ Cust Service name REDACTED]’
Your Issue ID for this chat is [REDACTED]
MJ: Hello, how may I help you?
Paul: Just curious about the statement on your website that says “Now get phone service for life — free phone calls with MagicJack plus”.
Paul: Does that mean we don’t have to pay an annual fee any more?
MJ: Hi, Paul.
MJ: There is an annual fee.
Paul: On the right side of the screen it says “Never pay a phone bill again”
Paul: So I just wanted clarification.
Paul: Why does the website say “never pay a phone bill again” if there is an annual fee? That seems a bit misleading, to tell the truth.
MJ: There is an annual fee, for the license of the device.
MJ: MagicJack offers free calls with in US and Canada, that means that you can call local and long distance number with out any cost but require prepaid purchase and/or we may charge you for calls to conference lines, platforms and certain non-ILEC area calls, or any call wherein we incur a cost from another carrier. We may provide for a fee, premium prepaid services, which may be powered by YMAX Communications Corp. (YMAX), and may include some inbound, international, conference, platform and outbound calls that receive a recording and certain calls to non-ILEC areas, and the rates for those services will be governed by listed price lists or tariffs. International calling purchases expire six months after purchase. magicJack, YMAX Communications Corp. (YMAX), and/or Vocal Tec may make available to you.
Paul: Huh. Maybe you can pass along that the statements on the website are misleading (at best), as they imply that you will “never pay a phone bill again”, yet you are going to charge an annual “fee” to use the phone, which is kind of a lot like a phone bill.
MJ: You will not pay a monthly bill for your phone calls as you will only renew the license of the device.
MJ: The annual fee is for the device and not for the cost of each of the calls that you have made.
Paul: Interesting. I doubt most of your customers see it that clearly.
Paul: A bill to use the phone (whether an annual bill or a monthly bill) would technically still be a “phone bill” even if it is significantly cheaper than a standard phone bill.
MJ: Paul, that renewal is for the device to be active and not for the phone calls that you have made.
Paul: Just trying to pass that along before somebody sues you for false advertising.
Paul: I could say the same thing about my cell phone bill. I have unlimited calls. So I’m paying for the “service to the device”, rather than for the individual phone calls I make, yet I still consider the bill to be a cell phone bill.
Paul: But whatever. Just trying to help.

So there you have it. The fee you pay annually is NOT a phone bill after all (even though it is a bill you have to pay to use your phone). It is a licensing fee to make the phone device be “active”.

Sounds suspiciously like a phone bill to me. But whatever. Tomay-to, Tomah-to. Nevada, Nevah-da. (Though you all know it really IS Nevada, right? I mean, Nevadan’s know how to pronounce their own state name, wouldn’t you agree? [SQUIRREL!])

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