Jersey Victims Off The Hook In Norvergence Scam
from the due-diligence? dept
A few weeks ago we wrote about how NY state had worked out a deal to take NY based businesses off the hook for the ridiculous scam leases they were tricked into buying from NorVergence. NorVergence, of course, was selling a cheap telco box by having quick talking salespeople lie to small businesses about how it could do everything ("unlimited broadband, landline and cell phone service with no per-minute charges"), and then charging them $500/month for it. NorVergence then quickly sold off these leases to financial institutions, took the money, and shut down. People who bought these boxes were left on the hook, and the financial institutions still wanted their monthly payments, even if the service no longer worked. Now, Rose has alerted us that New Jersey has reached a similar agreement with financial institutions to protect New Jersey businesses taken in by this scam. So, here's the question: why do each of these state attorneys general need to be doing this? Why aren't those who ran the scam being held responsible instead?
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Why Do States Have To Intervene?
I suppose the banks could sue NorVergence to get their money back, but why would they want to? Presumably the contracts were more lucrative than the amount paid to Norvergence, and there would be court costs and other expenses trying to recover that money. I doubt any company would go through that unless they had to. It probably takes the Attorney General to make them have to.
It would be nice if the companies just forgave the contracts on their own, but they aren't charities.
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