Company ? Vendor Dispute
$10,000 corporate dispute exampleThe dispute arose over a $10,000 bill presented in April of 2001 to Company A by Company B over high-speed Internet services. In May of 2000, Mark, Company B's account representative, along with Chris, his sales manager, came to Company A in order to solicit new business. During the initial meeting, Mark and Chris claimed that Company B needed to sign up at least one company in the area business complex. Company B desired to set up a point to multi-point digital wireless network on the roof of the Company A's building. Mark and Chris wanted Company A to be the first company in the business complex to become Company B's customer.
Company B presented Company A with an unbeatable offer. First, Mark and Chris offered Company A an attractive package that would combine the services currently offered by the local telephone company, long distance telephone company, and Internet Service Provider (ISP). Company B claimed that by combining four separate bills into one bill, they could help Company A save about fifty percent of their voice and data services. Next, Company A was offered over $4,000 in credits towards telephone and Internet services with Company B. Finally, Company B promised to pay for any switch back costs if Company A was not happy with the service or for any other reason.
The contract was signed in the middle of June of 2000. Company B needed about six weeks to set up and configure their equipment. The service was scheduled to commence in the first week of August. One week before the scheduled start date, Company A's Chief Technical Officer received a phone call from Chris. Chris explained that Company B was having some equipment problems and asked for some extra time to get the problems resolved. By the end of August, Company B had both voice and data services operating.
Company A was happy with the services for the first two weeks. However, after the two weeks passed, Company A's phone lines mysteriously stopped working. After Company A contacted Company B's customer support, the phone service started operating again. Nevertheless, no one at Company B could explain what the problem was. The mystifying outages happened four more times in the fall of 2000. Each time that Company A called Company B's customer support, the service would come back without any explanation for the outage.
At the same time that the phone lines started to experience sporadic outages, Company A's Internet service also stopped working. Company A's network administrator contacted Company B's customer service. It took ten phone calls in a two-day period to get the technicians from Company B to come out and trouble-shoot Company A's Internet connectivity problems. Six technicians visited Company A's office in a two-week period. The T1 router was replaced twice. Finally, Company B claimed that the problem was with Company A's internal network.
Company A made arrangements with their old Internet service provider; and the service was back up in less than one hour. In mid September of 2000, the president of Company A called Chris and informed him that Company A was going to drop Company B's Internet service. After hearing about the problems that Company A had with Company B's Internet service, Chris had no problems authorizing the termination of service and the reversal of all the charges. Chris apologized for the negative experience, and asked if Company A would consider keeping Company B as a vendor for the local and long distance telephone services. After Company A's team reexamined the savings benefit, an agreement was reached. Chris explained that it would take a few billing cycles to get Company A's account in order. He instructed Company A's payable department not to pay the Internet service portion of the Company B bill, since Company A would no longer use that portion of Company B's service.
For the exception of a few occasional phone glitches, everything was going well between Company B and Company A. Company B claimed a new office complex, and Company A enjoyed a considerable reduction of local and long distance phone services. In January of 2001, Company A's CTO called Company B's customer service department and asked them to stop billing Company A for the Internet service. Each time the CTO was told that Company B would take care of the billing error on the next billing cycle. By the time Company B's bill came across the desk of Company A's president in April, the amount of the bill was close to $10,000. Company A's president called Chris and asked him if he would help Company A to take care of the problem. After two billing cycles, the problem was resolved.
I think that Company B's sales team performed a commendable job of promoting and selling Company B's services. Unfortunately, Company B was not able to service Company A's account in a satisfactory manner. After Company A failed to resolve the billing dispute with Company B's customer service department, the dispute needed to be resolved by the manger from Company B's sales team. Chris' resolutions saved both companies substantial legal costs.