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Is YMax magicJack a Scam?

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MagicJackIn a recent issue of the Retirement Millionaire, a retirement newsletter I’ve been checking out, they mentioned some frugal VOIP option I hadn’t heard of before. MagicJack is a USB based device that lets you make phone calls using your PC’s internet connection for $19.95 a year, or $1.66 a month. I currently use Skype as my VOIP service, in part because of weekly hour-long chats for the Personal Finance Hour, but that costs twice as much for unlimited US calling – $2.95 a month ($35.40, plus international fees because Skype is based outside the US).

I’m always looking for a good deal :) so I thought I’d take a closer look.

How Does It Work?

You buy one of these magicJack units (if you’re going to buy it, don’t buy it from Amazon because you can get it elsewhere for cheaper, I linked to them so you can read the 160+ reviews more easily) for around $40 and plug it into your computer. You then take your phone and plug it into the magicJack unit and viola, you have telephone service across the internet.

So what do you get for the $40? You get free service for the first year, which is normally $19.95, plus a phone number and unlimited local and long distance calls.

Risks

The product itself is not a scam but there are some significant risks you need to be aware of if you want to replace your regular phone service with magicJack.

Your computer needs to be turned on and your internet connection has to be active for you to make any calls. If you have a power outage or internet problems, you’ve just lost your telephone service. As for your computer, if you keep it in top notch condition, you probably will be fine. If you don’t, any slowdowns or blue screens of death are going to kaput your telephone capabilities as well.

In normal scenarios, that’s all fine. If you can’t make a call or have to reboot your computer, not a problem. However, in 911 scenarios, you might find yourself out of luck. If there’s a power outage, you can’t call out. Corded phones are powered by the RJ-11 phone lines, so in some power outages you can still call out (in an outage cordless phones are usually dead too).

Finally, the End User License Agreement for magicJack gives them the right to include advertisements. The Coffee Desk, in their review of Magic Jack, pulled up this gem:

You also understand and agree that use of the magicJack device and Software will include advertisements and that these advertisements are necessary for the magicJack device to work … Our computers may analyze the phone numbers you call in order to improve the relevance of the ads.

Hmmm…

Awards

It turns out that back on January 17th, 2008, PC Magazine named it an editor’s choice, saying “So simple it’s almost perfect, the magicJack is the best home voice-over-IP gadget I’ve seen to date. Excellent call quality, a workable set of calling features, and an amazing price make this little box the VoIP wonder to beat.” (link)

But that was almost two years ago, what about today? In looking at the reviews on Amazon, they run the gamut in star ratings. You have 50 5-stars and 59 1-stars… I think this 3-star rating by Double W sums it up: “MagicJack is a mixed bag. It will save you money, but you do get what you paid for.”

If you’re itching to check out another review, Matt at Steadfast Finnaces swapped out Vonage for MagicJack and shares his opinions. For him, it dropped the price of phone service from $300 to $20, not $35 to $20, so I’m not surprised to hear he was pleased.

For now, I’m going to pass. It’s not a scam but there are enough “yellow flags” (things I consider headaches, but nothing “bad” necessarily) that I’ll just stick with Skype. Since I have a cell phone, replacing Skype with magicJack doesn’t seem like a good value.

Have you used it? Know someone who does?

{ 72 comments, please add your thoughts now! }

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72 Responses to “Is YMax magicJack a Scam?”

  1. I went to Vonage earlier this year. The cost is lower than typical land line charges, but the connection is mediocre and subject to static.

    Majic jack maybe even cheaper, but I’d be afraid the link would be even worse, and I don’t want to get any worse than what I have now.

    Vonage definately beats land lines on balance, but it isn’t perfect and I don’t want to experiment much further. We only use our land lines for extended calls, otherwise it’s cell phones all the way.

    As far as 911, every one in the house has a cell phone so problem solved there. Oh, and Vonage is fine for fax machines too.
    Considering we’re all shifting away from landlines anyway, looking for the cheaper services makes sense even if the service is line is less than perfect.

    • Roofer for a summer says:

      I don’t know about magic jack, but I know for sure that Vonage is a scam. The service is mediocre, but the fraudulent part is that it is near impossible to cancel their service.

      When I cancelled I think it took 6 months and many, many calls. Each time I was told that I was all set. But then they kept charging my credit card. When I called they said I had forgotten to call again to confirm my cancellation (which I was never told about) or other fake reasons why they couldn’t process my cancellation. After much aggravation and threating them with my lawyer wife they finally cancelled the service. Worst experience with any company I have ever had in my life. I would rather shoot myself then deal with them again.

      • Marco says:

        I’ve used Vonage for 5 years. Their service was great. Cancelling prior to your contract commitment is always a bear. They offer more services than all the other VOIP and hard wire phone companies. They even had a Santa Line my kids called to leave a message for santa…great memories…now, they’ve even expanded to be able to be used on cell phones….I wish would had that before I switched to ooma.
        sorry you had a horrible experience.

  2. Mel says:

    MagicJack is an aggravating piece of junk. It worked when it first came out and then bombs out all the time. People leave messages for me that never get delivered and there is no record for. Voice quality is horrible. Calls are dropped. Only works when computer is on. I tried it for a year and kept checking back hoping they had corrected the bugs but always a huge problem! It eats up your time and delivers merely aggravation. Check out all the negative reviews on Amazon!

    • Mel, this has been the reason for my hesitation with MajicJack. Sounds a lot like a cheaper version of Vonage, but we can push the frugal thing to our own detriment and we need to realize when we’re getting too close to that line.

      Never used MajicJack, but your review is telling me why–thanks!!!

  3. Chuck says:

    Ooma might be the compromise between Vonage and Magic Jack. The service reminds me a lot of Magic Jack, but you don’t use your computer. They have a stand-alone box.

  4. Rob says:

    I love Ooma. I got it in November 2008 so it has paid for itself already. The call quality is clear and I have had no problems. You will lose service if your power or internet goes out though. You can choose between free for life or a $10/month ($120/year) for premium features. Worth a look.

    I agree with Mel….MagicJack is very aggravating. I don’t use mine at all and I don’t like the ad system.

    • Bill says:

      Don’t you still need a real phone line for Ooma? and it acts like a peer to peer phone network and basically only eliminates long distance?

      • Matt says:

        No, that is not correct. I have had Ooma since August 2008. I have never paid a cent to any phone company for a land line. You can use Ooma to call any number, anywhere (international calling requires you to add $ to your account, which is done online, and international rates are pretty cheap – similar to, but I think a little more than, Skype’s international rates for many countries).

  5. CK says:

    Unless you are calling overseas all of these systems seem worthless.

  6. Marco says:

    I’ve used one form or another of VOIP including vonage, ooma, magicJack, skype, and google voice. all work great for me, and based on what I need. Not just in money savings, but in ease of use. granted most people don’t want to think about how a call should be place to reduce the cost I don’t mind thinking about it and reduce what I paid for, I do.

    I had vonage for about 4 years, I dropped it to switch to ooma now (5 month going and loving it.) Awsome service along with my home alarm and direcTV – I did need to re-program the alarm pad to add a “pause” before dialing an event.
    the trick to not loose phone service during any power outage is a battery back-up. my internet hub in the service panel has one (installed by Verizon) and my ooma and wireless phone are hooked up to another I bought for $50. never really tested it but according to the power consumption, I should be up for about 8-hours with the battery back-up.
    The Majicjack has worked well, and most computers, set up properly, will not see a problem by being on 24-hour a day. a few “work-arounds” to save money?
    sharing the phone number, length of call, or even the topics of my conversation with my frieds and family…sure knock yourself out…I mean if I was a spy maybe I would care…

  7. lostAnnfound says:

    Jim

    “if you’re going to buy it, don’t buy it from Amazon”…just curious as to why not to buy it from Amazon

  8. jsbrendog says:

    i’ve seen the latenight infomercials but always thought no way. then when they say “available at best buy” I knew it wasn’t something I wanted to come within 100 feet of. ha

  9. PA Mom says:

    I tried it a few months ago and spent 3 hours on the phone with their tech support. COULD NOT get it to work. It was on a brand new computer too, so nothing technical wrong. Tech support couldn’t find any settings on my computer that would block it. It just would not work. I sent it back.

    Apparently MagicJack is one of those things that’ll either work great for you from the start or just never work at all. There doesn’t seem to be much in between! LOL

    We also had Vonage for years and it worked GREAT for us. Never any problems. We just canceled it though (due to unemployment) and only have cells now.

    Check out this other blog. It started out with discussing cutting cable costs, but has broadened to phone service too. Very active chat over there today. Some good money-saving info.

    http://www.getrichslowly.org/blog/2009/12/16/how-i-cut-my-comcast-cable-bill-by-33-without-losing-any-service/?cp=1#comment-213314

  10. Caitlin says:

    I’m also wondering about the “don’t buy it from Amazon” comment. Is it more expensive there, or is there another reason?

    I am curious as to how we plug our phone into this viola. ;)

  11. saladdin says:

    I hate phones of all types. I went years without any phone , landline or cell. But I finally caved and added a landline with Charter. That lasted less then a year. I was paying 19.99 plus another $11 a month in taxes and fees. I thought about magicjack but found so many negative reviews I went with tracfone. I talk 20-30 minutes week on the phone at most so this is the cheapest for me. I still have never sent a text so that is something I don’t need.

    I dropped the Charter phone and picked up 40 bucks a month. Funny thing, when I called to cancel the Charter phone they magically said I qualified for a reduced rate of $14.99 monthly. That just pissed me off more.

    saladdin

    • Rob says:

      That’s how they get you to reconsider, yet if you called to ask for a better rate they would respond with “you are not eligible at the moment.” Similar thing happened to my parents when dropping AT&T for a Comcast package deal.

  12. Rob says:

    I remember seeing this advertised in an infomercial quite awhile back. That alone was reason enough not to consider it for me.

    Interesting to see it has survived to be around this long.

  13. Lulu says:

    I got a MagicJack for my family to call me internationally. My father is in the Caribbean and he uses it to call me in the U.S. all the time and also uses it to call my uncle in Canada.

    I also used it to call the U.S. when I went on vacation since it was easy to call my friends in Texas using that than to make international phone calls.

    I love the service because it is a LOT cheaper for him to use the Magic Jack than to use phone cards or to call directly. Now I would not use it here in the U.S. since I have unlimited calling on my cellphone….but it is great for international calling.

  14. Foo Finance says:

    I have never used magic jack. We use Vonage at work and it is fine. The problem is usually your internet connection (I work in IT). We have a lot of bandwidth at the office so it is ok for us.

    What really matters is your upload speed. These are usually a lot lower than the download speeds you see advertised from Comcast, AT&T, etc. If you are doing a lot of surfing, downloading, etc it will reduce the quality of the call a lot. People will sound choppy and broken up.

    VOIP is a great technology if you have the bandwidth to handle it. Most basic (in other words cheap) DSL and cable internet services do not provide adequate bandwidth to allow you to call and surf at the same time. If you really want to use them then you need to increase your connection. There is no “magic number” that you should increase too. Look at the recommendations for VOIP on google or the provider’s website. Then contact your ISP to see if they offer a connection that meets those requirements in your area.

    That said I am a skype fan. I like the pay as you go model. I don’t do a lot of calling using skype so it works for me. I don’t waste money every month when I don’t use it. I do 98% of my calling on my iPhone. I don’t have a land line at all. Working in IT and traveling a lot makes these the best choice for me.

    Do what works for you! I hope my techie advice helps some of you having issues with VOIP.

    - Foo

  15. Chris says:

    I don’t like the idea of leaving my pc on all the time while it gets flooded with advertisements. Does this mean that when you get home you have to go and close 30 popup windows?

    • Shirley says:

      No, not popups, delete cookies.
      IE CacheViewer makes that pretty simple even if you are keeping some.

    • ratedK says:

      The advertisement is included in the magicJack main window. If the window were divided into thirds it would be 1/3 Advertisement, 1/3 keypad, and 1/3 call history. The add changes about once every 30 minutes. It isn’t anything like internet pop-ups your picturing.

  16. aua868s says:

    Magic Jack is truly a very nice product…Only caveat I found was when I am connected through my work’s VPN, it does not seem to work…also, a high speed internet makes the quality much better..

  17. John says:

    I have had one for almost a year and if I had to do it again, I would have picked another solution.
    The voice quality can change drastically. I have to follow this procedure every couple of days: 1) figure out the phone doesn’t work (answer doesn’t happen or is REAL SLOW), 2) reboot computer 3) Get the ‘you must insert magic jack’ message 4) format the magic jack thumb drive (built into the unit) 5) download the software called update.exe 6) execute the update. 7) re log into the magic jack site to activate the unit.

    Would you rather have the phone ring more than 4 times before the magic jack voice mail system answers? TOO BAD…it will never happen. Want to use your own answering machine? Unless you set it to answer in 3 rings or fewer, you are out of luck. Want to change the voice mail email notification? Just rry…customer service will be happy to say they changed it…and it doesn’t happen. Go ahead and do it yourself…just don’t expect it to work. Yes, you might hear about hacks and I have tried them all, they don’t work or they work only for a while.

    Customer service and features have gone from bad to worse and will not get better. The company is focused on selling and couldn’t care less about them after the sale.

  18. A friend of mine has one since they first came out years ago, never had a problem saved over 50 phone bills so far!

    John DeFlumeri Jr

  19. Harsh says:

    Have used Vonage and Magicjack for international calling and both have worked nicely so far. No complaints.

  20. Paul says:

    JD – All the same downsides that you mentioned for MagicJack apply equally to Skype. They are not unique to MJ. If a VOIP solution is based on your PC, then loss of electricity, PC issues, etc. are all going to bork your phone service.

    I think you should edit the article to clarify this as you might give the wrong impression.

    Paul

  21. DRW says:

    I’ve used Magic Jack for about a year. Never noticed the advertisements. I think they show up in the MagicJack application window. No pop ups appear. Some friends originally suggested it since they have their own busines and can get their business line transfered to it. Use it mostly for teleconferences at home. Calls come in clear. Not sure how well I am heard on the other end. Did not know about the number monitoring though. That does make one pause.

  22. Glenn Lasher says:

    One of my consulting customers is using one and seems to be very happy with it. He is the only person I know to be using one.

    Mind you, he does live in a rural area, and some other folks I know who are friends of his complain that it is a long-distance call for them to reach him. (In the area in question, there are only two or three telephone exchanges that are a local call).

    Personally, looking at it from a technological and engineering perspective, I want to see this device re-designed as a stand-alone device — plug it into your ethernet and some power and your phone and never mind the computer itself.

    The reason I say this is twofold. First, it would take the computer (a potential unknown) out of the picture so blue-screen-of-death doesn’t become a phone outage.

    Second, there are some of us out in the world who do not use Windows, and so the software that is burnt into the ROM on the Magic Jack will not run. Magic Jack is not for use with Mac or Linux machines, and I personally have a house full of Linux machines. Further, in my computer consulting work, I am trying to expand the user base of Linux, because I believe it to be a superior platform to Windows.

    I might buy one when they meet the criteria of Linux compatibility or of platform agnosticism. Until then, I can’t recommend it in good faith as it conflicts with my other work.

    • Matt says:

      Glenn,

      I encourage you to check out Ooma, if you haven’t already. No need to run anything on your computer for the VOIP to run. I don’t work for Ooma, I’m a very pleased customer for the last 16 months.

      • Glenn Lasher says:

        Thanks!

        That was all I was going to say, but apparently Bargaineering has some sort of a “lameness filter” that blocks comments that ar that short.

  23. Ed says:

    I just hooked up my MagicJack and it’s working fine. Previously, I had only a cell phone with 450 minutes/month and no land line. The MJ lets me talk all I want for only an additional $20 per year. Your PC does need to be turned on for MJ to work, something to consider if you’re thinking of using it to replace your land line.

  24. zapeta says:

    Thanks for the info. Doesn’t sound like a scam but it sounds like it has all the same hassles of any other VOIP service, plus the ads. I’ll pass for now.

  25. Maddhatter says:

    During hurricane Ike, the only phones we could get to work after a couple of days were the hardline phones (after the cellphone batteries were as good as dead). While it isn’t worth it most of the time, when the power is out and the roads are cluttered with debris it was worth every dime. So does it make sense to have a hardline? Dunno, but giving my wife peace of mind is definately worth the $25-$35 a month. And if we weren’t concerned about those times the power goes out for days/weeks…we would probably just use cell phones.

    • What says:

      If there is a hurricane landlines are most likely o be down also it would better you had a magic jack hooked up too a laptop then you shouldnt have too worry about power issues for as long as your laptop battery works or just use google voice its free !!!


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