Expert: Timmy Chou - 5/27/2002

Question
Hello,

I have a question to ask regarding consumer rights.  I'm bought 3 Internet Kiosks
as an investment.  My plan was to place the kiosks around the city.  The kiosk are
like vending machines.  You put in dollar bills or swipe your credit card, and
you are then given access to the internet.

I've had the machines for 2 months.  Sinse then, I have had nothing but technical
problems from the machines.  The machines do not work properly.  They freeze,
re-boot on people and simply do not work.  I spent $10,000 for all three machines.  
I called the company and they don't know how to fix the machines.  At this point I've spent
thousands of dollars transporting the machines and now want to cut my losses short by
simply returning my machines and getting my money back.  The products were purchased in California.

My question is, can i just return the machines to the compnay for a refund?  
Does the company have a legal obligation to return my money?
Do I have a case in court if I have to sue them?

Thank You for your time, JM..

Answer
Thank you for your question!

Mediators act as neutral third parties to disputes and never "get involved" in judging the merits of conflict, but merely use special techniques to help the parties decide how to negotiate their own settlement.

The case you describe here is unfortunately very typical.  I am not a lawyer, nor can I mediate any dispute with you alone but I can respond to your question from my business consulting experience.  Note that this may have legal factors and you may wish to consult an attorney.

My opinion is that you have a chance to get these machines returned, but it will not be easy.  

First, you must send a certified-RRR letter to the company demanding a return authorization.  This letter must document your problems and reference any of their literature that says that they provide "technical support", warranty information, and the like; and you must also document your attempts to try to get them to fix these machines, etc.  This letter must specify a deadline such as within 10 business days.

You shold copy this letter to every consumer and government and press group you can think of, including the CA office of consumer affairs, the CA business regulation people, etc.  Your goal is to make it clear that you will go through anything to get taken care of including filing complaints with government agencies, sending copies to newspapers and television stations, and everyone else who will listen.

CA has very specific consumer rights.  You may be able to call the CA Bar Association and speak with a CA attorney who can explain these rights.  They may give you specific rights to return the equipment.  If there are such provisions, rely on them and make sure you comply witrh their provisions so you don't mistakenly wave any rights you have.

The idea is to make such a stink that it is a better business decision to just take care of you.  If you file a lawsuit you will spend at least five thousand in fees.  You must appear that you will stop at nothing and you have the best chance at getting some satisfaction.

Do not fail to make a detailed chronology of the events as they transpire as well as your actions.  

These are some ideas.  Feel free to follow up with additional questions.

For your information, the pros and cons of the types of dispute resolution
methods follows.

GOOD LUCK!

Arbitration, Mediation, and Litigation

Arbitration: the referral of a dispute to one or more impartial persons
for final and binding determination outside of the judicial system

Benefits of Arbitration:

    Confidential, no public record
    Limited exchange of documentation, information
    Quick, don't have to wait for a court date
    Arbitrators have expertise in the subject matter and are trained in
conflict resolution
    Cheaper than litigation
    Preserves business relationships

Negatives of Arbitration

    It's a compromise, no %100 winner
    Complex arbitration can be costly
    If not satisfied, may litigate the arbitration procedure
    Poor results with an unskilled arbitrator
    Both parties must agree to cooperate in the process

Mediation: the process by which parties submit their dispute to a neutral
third party (the mediator) who works with the parties to reach a
settlement of their dispute.

Benefits of Mediation:

    Neutral mediator can objectively suggest alternatives not considered
before
    Parties are directly engaged in negotiating the settlement
    Can be quicker than litigation
    Less costly than litigation
    Preserves business relationships
    85% of American Arbitration Association cases mediated find
successful solutions

Negatives of Mediation

    may not reach a binding decision
    unskilled mediator

Litigation: using the judicial system to resolve disputes

Benefits of litigation:

    a clear winner and loser
    uses a prescribed set of procedures
    more predictable outcomes
    is final

Negatives of Litigation:

    waiting for court dates can do more hare
    usually more expensive than mediation and arbitration
    part of the public record