lazarus_
join:2002-08-31
Resolute, NU
| Its not a "scam"
They are leasing equipment at really high prices to make a profit. The company I work for does the same thing for equipment rentals too..(not as outrageously priced though)
If your stupid enough to lease its your fault..
The *possible* problem is where all the money went, but if the company wasint "public" they dont have to answer to investors. If I were those guys I would give myself a huge bonus and just keep all that money from the profits on the lease. I'm sure here are many legal loopholes which allows that. (all you need are good lawyers and accountants)
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Facts are meaningless; you can use facts to prove anything that's even remotely true! Facts, schmacks |
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Unemployed
@speakeasy.n | I Need a job
Whats the new Start-up?
I know it could last for 3 years at least. |
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Megladon13
join:2003-09-05
Minneapolis, MN
| reply to lazarus_
Re: Its not a "scam"
Sadly this kind of crap happens all to often. The company i work for is a middle man for computer hardware & software, and we're the only company that sells this equipment in north america, and whats worse is we are the 2nd middle men, selling something we paid 400$ for, for well over 800$, guess what the origonal price was... Sad how places can get away with this crap. |
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Minister
join:2002-01-02
Fleeting
| reply to lazarus_
Not a scam? Are you kidding?
They're under investigation by three federal agencies, the labor department exploring the fact they took health insurance out of employee paychecks but never paid the health insurance company.
Some people were given estimates for a piece of sub-$1,000 hardware that exceeded $200,000! |
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sorne guy
@66.84.x.x | well? if they were stupid enough to pay for it, too bad for them
shop around, get lots of estimates, and never believe the hype, and you'll have nothing to worry about |
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Roundboy
Premium
join:2000-10-04
Drexel Hill, PA
| well.
whats sadder funnier was all the people in the novergence thread swearing that it was all ok.. and people were stupid for not doing it.
HA HA!
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if($power)
{$corrupt;}
elseif( abs($power) )
{ abs($corrupt); } |
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ob10
join:2003-07-27
Scarborough, ON | reply to Megladon13
Re: Its not a "scam"
Does any of these "company i work for" have a name?????
If they do, then let's have some names, otherwise........ |
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joebear29
join:2003-07-20
Alabaster, AL
| reply to lazarus_
You have no idea at the scam was about. What they were doing was leasing services at low (not high) prices, then rolling the lease into the $300 matrix box so they could sell it for cash to a leasing company. They lost money on every lease sold (since the price was too low) but got all the money on the front-end. They then paid extremely high salary to executives, and when the thing snowballed so they could no longer cover new leases with old, they bailed. meanwhile, people are stick with $45,000 leases for $300 equipment.
I am a pro-business Republican, and will never question anyones right to a legitimate profit, but what Norvergence did was outright theft. It was, essentially, a very complicated Ponzi scheme. |
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sorne guy
@66.84.x.x
| reply to ob10
who needs names? that's how nearly all business works (if you are a middleman) you buy something, you mark it up to the highest sellable price, and sell it
you, as the customer can say either "i can do it cheaper myself" or "that sounds good"
i've seen people pay 100 bucks to have an 8 dollar modem replaced--i think that's highway robbery, but they see it as the price of doing business. the numbers are bigger, but it's the same thing |
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roamer1
sticking it out at you
join:2001-03-24
Atlanta, GA
clubs:
| reply to lazarus_
said by lazarus_  :
They are leasing equipment at really high prices to make a profit. The company I work for does the same thing for equipment rentals too..(not as outrageously priced though)
There's no problem at all with leasing equipment in a general sense -- but it's pretty much unheard of for a provider of business telecom services to lease customers, in a separate transaction underwritten by an equipment leasing firm, equipment that's necessary to provide said services; legitimate providers bundle the necessary equipment in their rates. (This is very, very different than a company choosing on its own or on the advice of a consultant to lease a PBX, routers, etc., since PBXs, routers, and so on aren't tied to a single provider of telecom services like the MATRIX box was, before Adtran started working on solutions to help out stranded Norv customers anyway.)
-SC
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"it seems like all you ever buy is Abercrombie and cell phones" --a friend
No-Bull SE US Wireless Info: »www.sewireless.info/
Atlanta Apt/Condo Cable & Broadband Info: »www.atlaptcable.info/ |
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avd706
insert annoying animated gif here
Premium
join:2003-02-06
Union, NJ | hey, isn't this what SEVASOFT is doing?
take free software code, make a few changes, copyright the changes, then charge $20/year for support. |
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rstrandb
Premium
join:2003-04-17
Albany, GA | If someone is............
dumb enough to buy it, they're smart enough to lease it. Sounds like free enterprise to see.
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Deep thanks to those who defend America from those who would do us harm. |
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Trakker
Danger
Premium
join:2003-01-12
ß
| Some of you aren't old enough to remember
But in the old days you had to pay for each extension in your house for your phone. If you had a phone you had to pay a charge to use it (even if you didn't buy it from the Bells).
Cable TV used to charge per outlet in your house...
Paying for equipment that in nominal of value or paying for equipment that you already own is a cornerstone of American profiteering.
FYI about 3 of the 7 dotcoms that I worled for in the 90's did the same thing with the insurance and in some cases even the income tax withholdings...one company in particular ended up having us all on 1099's when we all signed W4's |
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Combat Chuck
Too Many Cannibals
Premium
join:2001-11-29
Erie, PA
| reply to sorne guy
Re: Its not a "scam"
I think what is worse is companies who know this and don't care.
I used to work a summer job as shipper/receiver in the parts department at a company who supplied equipment to General Motors. Someone at GM approached my company asking if we could obtain parts for other equipment, which we were willing to do. At one point I remember receiving a box from Delphi, which I opened, looked up who it was for and began to put a package together when I noticed that the address the parts had come from was remarkably similar to the address I was sending them to and that the parts had GM part numbers. I asked my boss if this was right and he replied that yes we were buying parts from a division of GM marking them up quite a bit and then sending them right back to what probably was the same factory; and that he had let them know that they could just buy them direct and save at least one day shipping time and a good deal of money but they didn't care and would rather do it this way.
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Windmills do not work that way! Good Night! |
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mocycler
Premium
join:2001-01-22
Naperville, IL
 ·AT&T U-Verse
 ·AT&T Midwest
4 edits | reply to lazarus_
I admit I'm not familiar with the details of this case, but I agree in principle: If you are clueless enough to sign a lease without doing any homework, hey, business is business, baby. Learn how to read or hire a lawyer to do it for you. Capitalism rules! There's an old saying: "Fair" is whatever you settle for.
They lease out equipment with the expectation they will get back more than what it cost them to purchase and maintain it. So what?
I recently rented a car for $60/day. It was a low-end Chevy Cavalier. That would come out to $1800/month... waaayyy more than what it would cost me if I just bought the car and made payments. I read everything and knew exactly what I was getting into and didn't have a problem with it. It was a one-day rental. Did I get screwed?
If they are guilty of nonpayment of insurance, theft, cooking the books, etc., that's a totally separate issue.
But renting out an item worth $300 on ebay to some dumbass at $45,000 for five years (that's $9000/year!)? Hey, hats off to ya (mocycler applauds loudly)! The discussion link referenced above is riddled with Norvergence customers who basically said, "It sounded too good to be true but I went for it anyway." Duh. Serves ya right.
Peace,
mocycler |
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Yowzaaah
Ours Go To Eleven
join:2000-12-14
DamnFlat, OH
clubs:
| reply to Combat Chuck
Chuck. You do realize that GM is not stupid don't you? What you were participating in is the "laundering" of artificial "sales" for the division you bought from. If GM had shipped its parts from one plant to another, even if different divisions, the pricing involved and sales amount would be suspect as these are not arms length transactions.
Insert your company, and bingo, the division selling to you gets a legitimate, unquestionable "sale" and the division buying the inflated priced goods from you is able to claim the full purchase price of the parts as a "cost" associated with manufacture of the finished product. Everybody wins...except the shareholders....who have inflated artificial sales in the 10-Qs and the consumer who pays more for a car than they had to because some of the component parts were artificially high.
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Don't suspect your friends...Report Them. Brazil (if you haven't seen it, you should) |
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Combat Chuck
Too Many Cannibals
Premium
join:2001-11-29
Erie, PA
1 edit | I don't believe that was what was happening in this case as this was a small ticket item, under a dollar each, there were only 100 or so (some sort of cheap screwdriver like tool, with a tip that looked like it was designed to break off, almost like a small shim) and it only happened once or twice in the 6 months I worked there. We purchased other stuff for them from other companies (nothing not related to what we sold; usually parts for older equipment that they had previously purchased from other competitors) so it's not like our sole purpose was to sell them back their merchandise. My suspicion, based on the way we worked their orders and how specific GM was in general about how you could ship stuff to them, was that it was a pain in the butt for their maintenance department to open purchase orders and it was easier for them to just buy most of their stuff from us in massive orders because most of what they needed was from us anyway.
From my end it was a pain in the butt to deal with them, so much stuff I ended getting returned because the PO# wasn't written with a fine tip black sharpie in characters exactly 1.3 +/- 0.001 inch tall, and I did not include 4 copies of the packing slip in the following colours (peach, periwinkle, lt. blue and orange) printed on 19 lb. stock in an approved shipping container with an edge crush strength of at least 30psi but no more than 35 psi... and on and on and on.
But I guess I could be partly responsible for inflating Delphi's sales by ohhh say $40.
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Windmills do not work that way! Good Night! |
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Combat Chuck
Too Many Cannibals
Premium
join:2001-11-29
Erie, PA
| reply to Minister
It doesn't look like they are being investigated for charging an inflated price, but for misrepresenting what the device did. If I buy $50 linksys routers, remove the branding and lease them to you for $100/month saying they will let you connect more than one computer per IP address I believe there's nothing illegal with that. But if I go and say that it will quadruple the amount of bandwidth available and spontaneously synthesize gold ingots at the rate of about one ingot every 3 days then that would be illegal.
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Windmills do not work that way! Good Night! |
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JPCass
join:2001-01-23
Denver, CO
| reply to lazarus_
If it wasn't a scam, Norvergence wouldn't have had to lie completely to their customers about how the equipment - for which they customers were paying an unconscionable premium - and service worked. They claimed that the box was part of a technology that allowed them to deliver unlimited flat-rate services, a deception that apparently hid the fact that their service rates didn't cover keeping them in business, and they had to keep taking the oversized profits from hardware leases to cover service costs. And reliance on continual inflow of new money to underwrite earlier transactions, is the hallmark of the Ponzi and similar frauds.
It's one thing to set up a profitable relationship; and another thing to leave customers with no service, and a oversided debt for a box that does nothing at all like what it was promised to do. |
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danza
Premium
join:2002-08-23
| reply to Roundboy
Re: well.
said by Roundboy :
whats sadder funnier was all the people in the novergence thread swearing that it was all ok.. and people were stupid for not doing it.
HA HA!
Hey it's still ok. They are happy with what they got and we enjoyed a few good laughs. Everyone is happy  . |
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