 
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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 | Megladon13
join:2003-09-05
Minneapolis, MN
| 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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| | ob10
join:2003-07-27
Scarborough, ON | 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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sorne guy
@66.84.x.x
| Re: Its not a "scam" 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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Combat Chuck
Too Many Cannibals
Premium
join:2001-11-29
Erie, PA
| 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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Yowzaaah
Ours Go To Eleven
join:2000-12-14
DamnFlat, OH
clubs:
| Re: Its not a "scam" 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 | Re: Its not a "scam" 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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Minister
join:2002-01-02
Fleeting
| 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 | Re: Its not a "scam" 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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Combat Chuck
Too Many Cannibals
Premium
join:2001-11-29
Erie, PA
| 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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| | | Skippy25
join:2000-09-13
Hazelwood, MO | Re: Its not a "scam" Dude, can you hook me up with one of those gold ingots maker wiggets?  | |
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| | | go5
join:2000-02-25
Portland, OR | Yeah I've got a Linksys router and it definitely excretes some ingots. | |
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| joebear29
join:2003-07-20
Alabaster, AL
| 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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| | 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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roamer1
sticking it out at you
join:2001-03-24
Atlanta, GA
clubs:
| 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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mocycler
Premium
join:2001-01-22
Naperville, IL
 ·AT&T U-Verse
 ·AT&T Midwest
4 edits | 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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norv guy kg
@Dial1.NewY
| Re: Its not a "scam" re mocycler
Thats easier said than done. How many of us read every detail of our cell phone contract? If they give you a bunch of legalese and you dont understand or notice it all, its natural. You can say that thats the customers fault but these people dont know telecommunications very well and nor should they. Especially when they have a salesmen who is standing in front of them sometimes lying. But even those that dont lie and explain what they percieve to be the truth, have the ability to decieve people. Im sure this company cooked the book, embezzled, and misrepresented themselves among other things But the fact that this can happen means that there are way too many holes in our laws to let corporations manipulate consumers and the public. | |
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| JPCass
join:2001-01-23
Denver, CO
| 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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lazarus_
join:2002-08-31
Resolute, NU
| I meant that leasing the equipment itself at high prices wasint a scam/illegal.. I'm sure running the company into the ground isint illegal either, or they wouldin't be planning to start up another company.. They are just using legal loops holes by the sounds of it..
If they were taking health insurance off the paycheques and not putting into an insurance plan, then thats fraud..
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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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norv guy kg
@Dial1.NewY
| I worked for Norvergence until their 500 person layoff in April. They called me a month later and asked me to join the comany again and I told them to screw themselves. They only laid off people then rehired many so they wouldnt have to pay their bonuses. This company was a scam from the day of it inception. Everybody was kept in the dark that worked there. I did some research and had a very bad feeling about the company. I told my friend that the company would go down in a ball of fire, claiming bankruptcy as soon as the sales started to decrease. It all came down to the T-1 lines. We were giving T-1 lines and phone service at prices that I thought werent possible. The way it was done was that they took the money from the bank up front so they could keep expanding. So it worked until there was a decrease.
Today my friend who I hadnt seen for months saw me in central park and told me the news of the company and how my prediction was correct.
Just looking at our offices you could see that there was very little bought. The most expensive things in the office were the chairs. It was such a massive scam that they tried to keep everyone including the managers in the dark about how things worked. It was just a policy of dont ask questions and you will get paid. They bred a backstabbing internal culture.
Not only was this company a scam but they also stole money from their own employees and treated them like cattle. There were some good employees at this company who couldnt find a better job. I feel bad for the hard workers who with good hearts who got caught up in this mess. It was the most ridiculous work experience of my life. They took your bonus money and lied when they told you that the appointments had cancelled. They fined you 1000 dollars if you were late and they recruited everyone with a pulse (though only good phone poeple would be able to keep the job). They also hired many ex convicts for tax purposes. A staff of season sales people, ex convicts and stock brokers.
From an internal perspective the company was run horribly. There were constant technical problems with our systems becuase of lack of foresight. They got the shipments wrong. And they didnt pay their employees for their last month of work.
The Salzano brothers should be sodomized. I am sure that they had mafia ties to begin with as much of Newark does.
I would also like to mention that all companies dealing with norvergence from quest to the banks and leasing agents should know that this was a scam. Its simply not possible to offer 800 dollars a month of service for 300 dollars. Its not just that they were over charging people. Its that the banks paid out money to norvergence so they could continue to sign up customers with unsustainable deals.
All of these companies should be persecuted to the fullest but Im sure that the Salzanos have done what they need to to save their ass. On the other hand, there was so much done illegally that I would bet they slipped up somewhere. The guys from enron thought they were safe as well. Well, Enron evolved into a scam. Norvergence was a scam since day 1. | |
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| alexm999
join:2003-01-25
Vernon Hills, IL
| If you feel it was a scam, worked for NorV & were let go by NorV then you had it coming. Yes they did run their employees hard, but because they only wanted the best. If were fired, don't take it personally and don't call it a scam. You scare other people into thinking this was an 'evil' company. They did what any other company would do. If I was in charge of a large corporate and profits are down, i'd fire a large amount of employees to streamline operations and to give myself a big bonus. It's capitalism 101.
Don't brand this as a scam because NorV received 5 years of profits upfront. What they did do wrong was pilfer the money away and the Uppermanagement was at fault. They stole or funneled money.
Plane and simple... | |
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Victim
@optonline.net
| The seemingly outrageous amount for the lease was offset by the seemingly outrageously low monthly rate for the service. The scam was the full intention to never continue to deliver the service. The scam was to sell the leases (originally issued directly by Norvergence) to unwitting third party leasing companies, then take the money (paid by the leasing companies to purchase the leases) and run. And a PS to the story, in seems that in at least some instances (like ours), the matrix box in fact was never even hooked up! This is a scam and fraud of the highest, most despicable order. | |
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the regulator
@verizon.n
| Don't be so stupid and naive as to take the position that if you're stupid enough to buy the lease you deserve to get screwed. If a car dealer sold you a new car that happened to be missing a water pump, then overheats and breaks down, do you deserve to lose the whole car because you didn't check to see if all the parts were there? There's something called "implied value" in every business transaction, and that is what Norvergence purposedly did not deliver. Read the Forbes story!!
»msnbc.msn.com/id/5907255/ | |
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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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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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danza
Premium
join:2002-08-23
| 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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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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imtim83
You All Deserve The Economic Meltdown
Premium
join:2001-06-03
Kenner, LA
|  Guilt
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Thank God i am not getting married, having kids, going on a date, etc! Oh Thank God! | |
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Karl Bode
News Guy
join:2000-03-02 | Re: Guilt Says something about a culture when half the people responding to this story seem to think it's legitimate capitalism..... | |
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jsinaiko
Premium
join:2001-04-25
Chicago, IL
·AT&T Midwest
| Re: Guilt said by Karl Bode :
Says something about a culture when half the people responding to this story seem to think it's legitimate capitalism.....
Exactly. Capitalism is not a license to steal. If everything was legit we wouldn't need the SEC or any of the other regulatory bodies that are out there. Crooks like Ken Lay and Jeff Skilling think the same way as some of the posters here. My guess is that if any of them were ripped off they would be the loudest squealers. Of COURSE the folks that bought this stuff should have researched and shopped around, and were somewhat dumb, but they are still victims. I remember here in Chicago some con guy scammed a little old lady into getting her house tuck-pointed because he told her the house had "cancer of the bricks." It might have been dumb of her to accept that but it was still a con game and illegal. Off with their heads! | |
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tomkb
Premium
join:2000-11-15
Avon, OH
clubs: | so? Half the population would be out of work if there was no middleman. Imagine if every manufacturer sold direct to the public only. | |
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See 6 replies to this post |
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alexm999
join:2003-01-25
Vernon Hills, IL
| Reply to Norvergence Everyone keeps saying this is a Scam. It wasn't. The numbers worked out. Customers received unlimited/fixed rate calling. If the top tier (President, VP) didn't steal money from the company, then everything would work.
And about the lease. What does it matter is I charge you $100 a month for 60 months or get $6000 up front from the leasing company????
If the company was smart, they would have a 3rd party hold the money in an interes bearing account... | |
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See 9 replies to this post |
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mcfrisch
Revelare Pecunia
join:2000-07-02
Lakewood, OH |  The way I see it...
Let the buyer beware and the seller!
The seller is responsible for providing sufficient information about the product. I vote fraud!
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Mcfrisch(Cox HSI : Cleveland) | |
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Norvergence Money Trail
