The Space Monkey Upgrade Scam

Earlier this year, Space Monkey launched their Kickstarter campaign for their device and service. Before I get into my issue, I’ll give you a short background.

About Space Monkey

Space Monkey is a cloud storage solution that offers 1TB of storage for $10/month, by doing things a little differently. They give you a device to use, you put your files on the device, your data is encrypted on the device, then chunked up and backed up across their network via Bittorrent. It’s a really cool idea, and I had been following the company since they won a startup competition a couple years ago. When I got the email that they had launched a Kickstarter, I immediately backed the project at the $99 level (“Early-bird special. 1 Terabyte of Space Monkey storage for 12 months (device included in your subscription).”), and emailed all of my friends about it. They have been shipping devices for the last couple of months, and appear to be making good progress through their queue. I’ve had mine for a couple weeks. The jury is still out for me as to how I feel about the service. It’s the sort of thing that really requires a fair amount of time dealing with it before you can make a fair evaluation. That said, so far, I like it.

The Upgrade

About two or three weeks ago, I started getting emails from Space Monkey about ‘upgrading’ my service. They are starting to sell the device on their site, and the pricing is different. Basically, now they’re selling the device and first year of service for $199, and going forward the service is $49/yr instead of $110. The upgrade email was asking Kickstarter backers to pay $79 to buy out their device from Space Monkey, and that they would get onto the $49 plan after the first year (which had already been paid for). Another week goes by and they threw in 6 months of service along with the $79 fee. The deadline was to be the end of December. That’s the backstory.

I’m going to hold off on giving my feelings about this, I’ll come back to that shortly. I can see two ways of looking at this. One way is to say, ok $80 to buy out the device then getting 6 months of service, and then paying less going forward is not a bad deal. The other way is to say, as far as I’m concerned, I already own the device, so what am I paying $80 for aside from to have Space Monkey switch my plan for me? Other people might fall somewhere in between, being annoyed at needing to pay $80, but thinking it’s a good enough deal or simply not wanting to make an issue of it.

If you don’t think that you own the device, then I don’t think that the upgrade offer is a bad deal. It offers a certain value, and I think the value is in line with the offer.

If you do think you own the device, this is email is a big deal! They are claiming to own something that you thought you bought from them already, and trying to sell it to you a second time. Regardless of whether or not you want the upgrade, it is really important to get this issue straightened out. It is also a huge red flag that might make you question whether or not you want to invest any more of your time or effort into getting your data onto their service, given that trust may now be a serious issue.

I own the device that I’ve already paid for and have in my possession

My view is that I own the device, and I’m upset that they’re claiming that I need to pay them $80 to buy a device that I already paid for. Given that this is my view, I emailed Space Monkey’s support and asked them to clarify the offer, what exactly I’m paying for, since I already own the device. What followed was a long back and forth email, which was incredibly frustrating.

Essentially, their view was that I was leasing the device from them, and that at the end of the service if I didn’t want to renew, that I would need to send the device back. The upgrade fee was to cover the cost of the device. A customer service rep wrote to me, “We said in the rewards "device included in subscription,” as in it was no longer included without the subscription.“ They also mentioned that they had said something about leasing the device somewhere in the FAQs. As such, the offer makes sense and is fair.

I responded, that "device included in subscription” does not mean “it was no longer included without the subscription”, that though it may have been the intended implied meaning, it was never made explicit (and I didn’t even think that it was implied). They should have been explicit about this in the flow for backing their Kickstarter project. They did not, apparently they had people ask the question, and answered it as they were leasing the device, but it was never made clear in the flow of backing their project. The example that I gave was that if I were to walk into Verizon and get one of their free phones that accompanies the service, I get to keep the phone when my contract is up. To me, “device included in subscription” means that the cost of the device is rolled into the service fees. This made sense to me because they’re distributing all of their backups across a P2P network, and therefore probably don’t have much storage costs themselves. The cost to them is probably incredibly low per customer. What’s more, the device is pretty useless without the service, and it’s way cheaper than the competition. If they give users a good experience in their first year, they’ve probably got a customer for at least a few years.

I went back and re-read the Kickstarter and did not find any reference to the idea that I would be leasing the device from them. I asked the customer service rep to prove to me that they owned the device and that I was leasing it. I also asked them to tell me how they planned on reclaiming the device at the end of my service when I refused to return it. They could not give me a satisfactory answer to the question of proving that they owned it (aside from saying that if I continued to use it, I would be entering into a new agreement that they owned it). They did not even attempt to answer my second question.

Now that I’ve given you a short version of the back and forth between myself and Space Monkey’s CS reps, as well as links to the Kickstarter and Space Monkey’s site. I’m putting it to the internet, because I’m completely sick of thinking about this:

Who owns the device?
Is the offer reasonable?
Should I be upset about this?
Should I just send it back and ask for a refund?
What should I do???

Update

I decided to go for the refund.

There was a decent discussion on Hacker News earlier, where some of the Space Monkey employees weighed in and offered their perspective.

I’d also like to be clear about why I used the term 'scam’ in the title. I was referring to the upgrade offer specifically, not their service. Their service seems like a legitimate service, and that they had simply screwed up the wording on their Kickstarter page. As I have outlined, they did not do the work necessary to state explicitly that the device was a lease. I think that they are aware of this, and are hoping to sort of sneak this by customers in their upgrade offer (though I do not know). When you try to sell somebody the same thing twice, by being sneaky, that is a scam.

customer service