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joebear29
join:2003-07-20
Alabaster, AL
| Re: Its not a "scam" 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. | |
|  alexm999
join:2003-01-25
Vernon Hills, IL
| Re: Its not a "scam" The norvergence product worked and worked well. What you're not mentioning is the following:
1) Because of converging Data & Voice, all local calls were free so the customer was not being dooped.
2) LD (Long Distance) was being handled by Qwest. NorV was getting rates at or below one penny (.01) cents per minute. So if the customer was paying 5 cents per minute, NorV would give them 30% off dropping thier LD cost to $.035 cents per minute. Even if Norv was paying .01 Cents per minute and charging the customer on the lease .035, they were still making out .025 cents per minute.
The problem didn't lie in the 'Scam' as everyone else puts it. (mainly the competition). But the problem lies in the top tier of Norv who cooked the books and stole money from the company.
I'm worked the numbers on an excel spread sheet every which way, and it comes out the same every time. If you dont steel money, you will make money. | |
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