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Purchased item online, company ghosted product and customers

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nwlce

Junior Member
What is the name of your state? TX

I purchased an item back on May 26 of last year and it came with a year of service bundled with the item. Unbeknownst to everyone, the company started struggling and dwindled down operations in what everyone is pegging around September-October of 2019. The item I purchase requires a subscription to work and without one, you lose important functionality of the product (for lack of better words). Looking back, I was never even notified of a sunset date or anything it was just like over the past few weeks I noticed functionality was dropped and there doesn't appear to be any technical support, etc. or a way to purchase an extended license. When you go to the manufacturer's page, you get a popup that they sold the company and it's assets and the new owner is basically trying to figure out what to do with all the customers that bought this item. Since it's been less than a year and this item was fairly expensive, is there any sort of recourse I have to recoup what I paid? And to give you an idea of how poorly this was executed, you had major retailers still selling this product who had no idea what was going on until a magazine reached out to them for comment (and this was as late as February 2020) -- so those people that purchase the item back then would not even be able to get but 2-3 months of the "included" subscription, which they price renewals at $99/year. I thought about reporting the company that acquired the original company to the BBB or AG's office but I'm not sure what the right next step should be. Thanks for all your help and input.
 


quincy

Senior Member
You should probably wait to see what the new company decides to do with the old customers’ subscriptions.
 

Just Blue

Senior Member
What is the name of your state? TX

I purchased an item back on May 26 of last year and it came with a year of service bundled with the item. Unbeknownst to everyone, the company started struggling and dwindled down operations in what everyone is pegging around September-October of 2019. The item I purchase requires a subscription to work and without one, you lose important functionality of the product (for lack of better words). Looking back, I was never even notified of a sunset date or anything it was just like over the past few weeks I noticed functionality was dropped and there doesn't appear to be any technical support, etc. or a way to purchase an extended license. When you go to the manufacturer's page, you get a popup that they sold the company and it's assets and the new owner is basically trying to figure out what to do with all the customers that bought this item. Since it's been less than a year and this item was fairly expensive, is there any sort of recourse I have to recoup what I paid? And to give you an idea of how poorly this was executed, you had major retailers still selling this product who had no idea what was going on until a magazine reached out to them for comment (and this was as late as February 2020) -- so those people that purchase the item back then would not even be able to get but 2-3 months of the "included" subscription, which they price renewals at $99/year. I thought about reporting the company that acquired the original company to the BBB or AG's office but I'm not sure what the right next step should be. Thanks for all your help and input.
What was it that you purchased?
 

nwlce

Junior Member
Hey @quincy so we meet again haha. Unfortunately everything is going towards subscriptions so I feel like this is only going to become more and more common place. @Just Blue it was a cloud-connected security camera. So you need the subscription for remote viewing. You still have local viewing but it kind of defeats the purpose because if you're not onsite you won't get motion alert, etc. @quincy I'm assuming I would file with the BBB for the acquiring company or the old company and they would know to pass it on? I also tried to see how I bought it, I was praying it was on a credit card because there was a small possibility for a dispute, but it ended up being on my business debit card so yeah no such luck there.
 

doucar

Junior Member
The BBB is useless, so complain if you wish you may fall into a company that cares about its BBB rating but I doubt it under these circumstances. The BBB has no enforcement power of any kind.
 

quincy

Senior Member
Hey @quincy so we meet again haha. Unfortunately everything is going towards subscriptions so I feel like this is only going to become more and more common place. @Just Blue it was a cloud-connected security camera. So you need the subscription for remote viewing. You still have local viewing but it kind of defeats the purpose because if you're not onsite you won't get motion alert, etc. @quincy I'm assuming I would file with the BBB for the acquiring company or the old company and they would know to pass it on? I also tried to see how I bought it, I was praying it was on a credit card because there was a small possibility for a dispute, but it ended up being on my business debit card so yeah no such luck there.
As mentioned in your other thread, a complaint filed with the BBB can be of limited value. The BBB can only contact the company and try to negotiate a satisfactory resolution to a problem that exists between a company and a consumer. A company is free to ignore the BBB and nothing really happens if they do. But if you want to file a complaint, you could name both the original and the new company.

A complaint filed with your state Attorney General could be of some value, especially if there have been several consumer complaints similar to your own.

And writing (or having a consumer protection attorney write) a letter to the corporate office detailing your issues with the subscription service is another option to consider.

How the original company was sold to the new company matters. It can take awhile for a new company to take stock of what they have and organize so they can avoid or correct the problems experienced by the original company.
 

nwlce

Junior Member
@Zigner I'll double-check what the actual ToS says, but considering it came with a year of service and we didn't even quite reach that (and they were selling subscriptions) it would seem to imply that this was not the anticipated outcome. @doucar I checked and they have 7 complaints all unanswered so I figured that would be ineffective as well. @quincy I'm filling out the form on the AG's page now. They don't have a corporate headquarters anymore. The new company that took them over's webpage won't even load because it says they exceeded their bandwidth (likely from all the users of this product wanting answers). After writing the AG I don't have a choice but to wait but it seems that the new company took ownership of them around September of last year from what you can gauge from activities on their social media accounts but the tech support page has been disabled as well and doesn't load. Once again, thanks sincerely to everyone that responded.
 

Zigner

Senior Member, Non-Attorney
Realistically, you may simply be out of luck. I would suggest that you pursue a different solution for your remote monitoring needs.
 

quincy

Senior Member
@Zigner I'll double-check what the actual ToS says, but considering it came with a year of service and we didn't even quite reach that (and they were selling subscriptions) it would seem to imply that this was not the anticipated outcome. @doucar I checked and they have 7 complaints all unanswered so I figured that would be ineffective as well. @quincy I'm filling out the form on the AG's page now. They don't have a corporate headquarters anymore. The new company that took them over's webpage won't even load because it says they exceeded their bandwidth (likely from all the users of this product wanting answers). After writing the AG I don't have a choice but to wait but it seems that the new company took ownership of them around September of last year from what you can gauge from activities on their social media accounts but the tech support page has been disabled as well and doesn't load. Once again, thanks sincerely to everyone that responded.
I think filing the complaint with the AG’s Office is a good first step.

With luck, the new company will be in a position to address all of the consumer complaints soon.

Unfortunately, there is often little that consumers can do when a company they have been dealing with goes out of business. I imagine there will be many more companies closing their doors in the near future, leaving their customers with unfilled orders and useless service agreements.

Good luck.
 

zddoodah

Active Member
Since it's been less than a year and this item was fairly expensive, is there any sort of recourse I have to recoup what I paid?
Ummm...you bought the product 352 days ago and apparently got everything you paid for until you noticed a drop in functionality "over the past few weeks." Seems like the most you might be entitled to would be the cost of one month's worth of service.

Unfortunately, it sounds like the seller/manufacturer is out of business, so you might have no practical recourse.
 

LdiJ

Senior Member
I think filing the complaint with the AG’s Office is a good first step.

With luck, the new company will be in a position to address all of the consumer complaints soon.

Unfortunately, there is often little that consumers can do when a company they have been dealing with goes out of business. I imagine there will be many more companies closing their doors in the near future, leaving their customers with unfilled orders and useless service agreements.

Good luck.
I agree that this is a situation that will likely be similar to things that will happen as a result of COVID-19. When I started my restaurant I bought out the assets of a previously existing restaurant. I deliberately did not buy the liabilities. However, for the sake of consumer good will I did honor existing gift certificates for a period of time even though my restaurant was very different and had a different name than the previous one because I did keep a portion of the previous name.

However, I did eventually stop accepting gift certificates issued by the former company. Part of the reason why was because I discovered that the former manager of the restaurant issued hundreds of them for free because he was ticked off that he was losing his job.
 

quincy

Senior Member
What the new company purchased in the way of assets will make a difference. Existing customers can be either an asset or a liability.
 

nwlce

Junior Member
@quincy filed. @zddoodah it just kinda sucks because you don't buy something super expensive like that thinking it's on a less than one-year life cycle. It definitely makes you approach startups in a new light. I know I've even scaled back on kickstarters for the same reason. This type of thing gives you a whole new perspective on those kinds of projects and I'm pretty sure this company was originally a kickstarter or something like it. The part that really sucks is you know the executives took a lucrative payout package while the lower-level employees and customers took it on the chin (We Work comes to mind). @LdiJ Thanks for your contribution. I am constantly amazed at how much I learn by posting and reading other's posts on this forum and I'm sincerely grateful for that. And that's crazy about the previous manager doing that. I'm assuming he was separate from the owner which would make that easy to do when it's not your company that you're burying. @quincy in response to your last post the last update they posted is to stay tuned and from what I'm gathering from posts around the web that was back in September of last year. Interestingly enough, a lot of those kickstarter and similar sites you're seeing a boost in people coming out with competing products to this and a lot of them are YEARS past their promised ship date and still have no product to deliver and not offering refunds. And this is completely legal. Apparently it's disclosed when you buy it that you are basically buying into the development of the product first and the actual product (if it actually comes to fruition) second. It's crazy that there's no consumer protection laws on stuff like that either because a lot of these projects have taken in millions. Once again thanks everyone!
 

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