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Richard N. Davis
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15 years of experience as an amateur investor. Fundamental Long Short investor.
  • MagicJack Losses The Battle On 911 Fees 0 comments
    Sep 6, 2013 4:36 PM | about stocks: CALL

    As we have anticipated in our April article this year, MagicJack (NASDAQ:CALL) is starting to collect E911 fees from its clients, increasing their bill by $6-$60 p.a.

    This is the email MagicJack's clients received:

    Dear customer:

    This is not a bill, but a choice for you as described below. If you decide you will not pay, you do not have to take any action.

    Due to recent changes, magicJack will start to charge for 911 services for 911 capability. If you decide to continue to receive certain limited 911 calling privileges as described in our TOS, you will need to go to my.magicjack.com and fill out the necessary forms and give new debit/credit card information.

    magicJack will not profit by collecting these pass through charges for the 911 authorities.

    The charges will be billed annually by email and may cost anywhere from $6.00 to over $60.00 a year. On average throughout the country it will cost about $12.00 a year.

    magicJack will provide limited exceptions for hardship cases for people who made a 911 call before July 1, 2013 and will post notification or email these certain customers later concerning the eligibility.

    These unfortunate changes were made necessary because certain emergency 911 Districts in certain jurisdictions requested we attempt to bill on their behalf and benefit.

    Dan

    As we have reported, we believe the fact that MagicJack did not collect the E911 fees was unfair competition and now regulators have caught up with the company. We believe this will make MagicJack's service significantly more expensive to users and considering the track-record of service and complaints, will cause many subscribers to terminate their subscription with the company.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Themes: short-ideas Stocks: CALL
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