Cisco suing small business victims of telco-finance scams
Mon, 11/1/10 - 3:41pm View comments
In the video below, Australian Competition and Consumer Commission (ACCC) Chairman - Graeme Samuel, describes running into a "brick wall" at the CEO level of Cisco Systems trying to get Cisco to act "reasonably" towards the small business victims of telco-finance scams.
Here's how the small business customer telco-finance scams work:
1.
Telco sales representatives working indirectly for Cisco Systems claim prospective small business customers will receive nominated equipment finance for FREE.
2.
The telco sales reps will lead small business customers to believe that the telco will cover the cost of all equipment.
However simultaneously, the small business customer is asked to sign two different contracts:
One for telecommunication services.
And a second agreement to pay the rental on the equipment.
3.
The telcos then lodge the rental agreements with Cisco Systems, with the purchase prices of the equipment often being 3 to 4 times the market value of the items.
Some rental agreements are changed to include equipment that was not part of the arrangement.
4.
Cisco pays upfront lump sums to the telcos for each deal. Often these telcos will go out of business after receiving their upfront lump sum payments from Cisco, leaving their small business customers to seek a new telco provider, while also leaving the small business customer the responsibility to pay Cisco monthly rental fees, often for terms over five years on equipment that's been priced 3 to 4 times over its market value.
5.
Cisco sues the small business victims of the telco-finance scams to enforce Cisco's rental contracts that often have terms over five years on equipment that's been priced 3 to 4 times over its market value (even though these small business customers are misled to believe by the telco representatives that the equipment they receive will be FREE and that the telco will cover the cost of all equipment).
Click the below photo of Graeme Samuel to launch the small business customer telco-finance scam video:
