Customers of Edge Computers, along with the Commerce Commission, are furious at what they see as an attempt by the company to whitewash its conviction for misleading conduct.
Manager Ian Lyte told Computerworld last week that the company had been guilty of a “simple mistake” and that the problem motherboards were only sold through what were at the time fledgling operations in Wellington and Christ-church.
Lyte made similar comments to other publications. However, Edge shied away from running the same line past a judge. The company pleaded guilty to the charge, despite using an available defence of “reasonable mistake” under s44 of the Fair Trading Act. Edge was fined $50,000 — the highest yet under the Fair Trading Act, according to the Commerce Commission.
At least one retailer says he bought 486 computers with the fake mother-boards from Edge’s Auckland office.
“We bought only three or four which had the fake cache,” says Mike Dennehy, of Vision Computing in Mount Maunganui. “One is still in our possession.”
Price lists and invoices supplied by Edge’s Auckland office stated the machines had 256Kb external cache. He sent them back to Edge, which in turn sent them back unchanged.
“They didn’t ring, they just sent them back saying they were never supposed to have cache on them and we didn’t pay for cache.” It was only when he produced the invoices that Edge was prepared to replace the motherboards.
He describes the fine Edge incurred as “a joke” and takes issue with Lyte’s claim that no one has been disadvantaged.
“Yes, we have been disadvantaged — both materially, in our costs involved in fixing the problem for our customers, and in the damage to our good name. Our customers feel we should have checked the computers out.”
He also believes there are a number of other resellers like himself who have been affected by the fake cache motherboards but have not complained to the commission about it. Edge has said only a few of its 900-odd customers at the time were affected by the fake cache.
Commerce Commission chairman Alan Bollard has also strongly criticised Edge’s public statements since the case.
Edge has circulated a facts sheet which claims, amongst other things, that it was not charged nor did it plead guilty to an offence of selling fake cache mother-boards.
“Judge Borrin has specifically stated that Edge knew what it was doing when it sold computer components including dummy chips,” says Bollard. “Judge Borrin has endorsed the commission’s assessment that Edge deliberately misled its customers.”
Meanwhile, Edge Australia is distancing itself from the New Zealand operation. Finance director Jim Sloman told the Computer Daily News that the two companies are totally separate. “They are our customer, that’s all,” he was quoted as saying.
However, the extent to which the New Zealand operation was under the thumb of the Australian office was very much a feature of the case. The weight of the prosecution case rested on faxes from Edge Australia regarding “dummy” mother-boards. Furthermore, Judge Borrin, in setting Edge’s fine, took into account the degree of control exerted from Australia as one of the reasons for not bringing down a higher penalty. Borrin said that “at least to some extent ... the managers of the company in Wellington and Christchurch were mere functionaries, the executors of a policy which was set overseas”.
Meanwhile, Edge last weekend advertised that it will test, for free, any 486 PC bought from any of its dealers between May and December 1995.