Lenovo Forgets To Charge Customers, Then Sends Them To Collection Agency
Bart wrote to us about a strange experience he had after purchasing a new Thinkpad from Lenovo. He had a perfectly smooth transaction, until months later when he received a letter from a collection agency. The agency was demanding payment for the laptop he had already paid for. Or so he thought.
He wrote:
A weird thing happened to me on my recent ThinkPad X61 Clearance purchase. I got a letter from Lyons Collection services about a remaining balance for my purchase.
Surely enough, I went back into my records from March (date of purchase) and they had only billed me for shipping and then marked the transaction completed. I asked the Lyons rep, and he said that this would not go on my credit report and that they got a large number of similar collection requests from Lenovo.
I went ahead and paid since it seemed to match what I had from my records. I did get a Paypal notice that authorized payment, but ultimately I was only charged for shipping.
"A large number of collection requests," eh? Interesting. Should Bart have noticed that his card was never charged for the purchase? Yes, but it was an oversight on his part, and we'd like to think that it's not his job to make sure that he has exchanged money for a good or service. Optimistic? Maybe.
Before we had a chance to post Bart's letter, though, we received a message from yet another new Thinkpad owner. G. wrote to us:
I bought a laptop from Lenovo.com on August 10th. I checked my debit card online to see when the money will be charged to my account and something weird happened. It showed as if they charged me for it for 5-6 days after I bought it, but now I have all the money back in my account, as if they never charged me for the laptop. Oh, and I received the laptop on August 18th. I'm typing this on it actually. What should I do?
We've been hearing odd things about Lenovo's shipping and ordering since the very earliest days of Consumerist. For starters, G. should immediately call customer service, and escalate as needed in order to avoid being sent to collections.
If you purchased from Lenovo since, apparently, the beginning of 2009, you should make sure that the transaction has cleared your credit card statement or bank account.
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Comments:
Here's the main problem I see...
They realize that a large number of their customers have not paid for their merchandise, despite, you know, not having a "bill me later" option...
Instead of looking at their payment systems to see what kind of error it could be, they just send them all to collections.
What.
The.
Hell.
So was the money taken out of his account and then refunded? If so, then he's got the financial records to back up his story and he should be fine if he can get high enough on the support foodchain.
Me? I'm fanatical about my credit. If I purchase something and don't see the money come out of my account shortly after receiving the product (if not when I get a tracking number), then I'm making some phone calls.
In most cases like this, I'm guessing the consumer notices but conveniently ignores the fact they have been using a product for months that the company didn't charge them for....maybe I'm being overly cynical, but how do you not notice that a purchase as large as a laptop hasn't gone through?
I had this exact same thing happen with a medical bill. When I called the billing company I told them I had received a letter from a collections agency. The phone rep asked if I wanted to set up payment. I very quickly told her I would like a bill first. She immediately changed tones with me. It seems they didn't bill anyone for several months, however, their collections software was still working perfectly. In the end it took 5 phone calls and they canceled my bill because of what I went through.
That's a fairly unreasonable takeaway, assuming you're in the market for a quality, inexpensive laptop that will last.
So yeah. Do buy stuff from Len"o"vo, just pay enough attention to your finances that you will realize when $650ish dollars either doesn't get removed from your account or gets put back in.
@LupusGray: Well, why should it fall on the hands of the consumer to correct the error? If a company can't get its billing system straight, it's no ones fault but their own. Let's reverse the situation though... company double bills and the consumer doesn't notice. Then seven months later, they see the mistake. How likely will the company, fork over the money? My guess is that they would probably say "how do we know you didn't order two?"...
I had the same thing happen to me with a medical bill years ago, even down to a very nice collection agent who assured me that it wouldn't be reported to credit bureaus. The hospital had, similarly, just sent a batch of bills straight to collections without ever sending them to insurance or patients.
This seems like a pretty good deal for the collections people.
Think about it. Collections agencies buy debts from the debtholders for some percentage of what the debt actually is. The agencies negotiate this based on the assumption that they won't get all the debts from the consumers or that they'll only get part of some of the debts.
But if there are a large number of these debts in which the consumer can say "oh, well, I bought it, so obviously I should pay for it," like this guy did, then that's 100% of the debt.
In the spirit of good business and good karma, this worked out well for everyone involved.
But it begs the question: whose responsibility is it to ensure that the proper amount of money was exchanged for this laptop?
From the legal perspective, it takes proper consideration from both parties to make a business transaction or contract. In this case, Lenovo provided consideration in the form of a laptop. Bart provided consideration in the form of an authorization to charge his credit card for a specified amount.
I would argue that because Lenovo was responsible for placing the charge, and only after placing the charge did they send a laptop to Bart, both parties gave their proper consideration and the transaction was complete at that point.
Now that Lenovo decided they were shortchanged, they want their money, but since they completed the transaction by charging Bart only shipping, even though they had authorization to charge more, the loss is Lenovo's to eat.
(This raises another question also. How long is an authorization to charge one's credit card good? 30 days? 60 days? Until some sort of charge is made, correct or incorrect?)
Now, I don't advocate screwing over a business for any reason, especially in light of the fact that someone probably just made a mistake. Being a good consumer is holding up your end of the deal, and this is exactly what Bart did, so good for him! We are here on this site because we are good consumers who don't like being taken for a ride, so we definitely shouldn't take a business for a ride.
The firm I work for had a similar experience with Lenovo about a year ago. We purchased a ($3500) laptop, and were charged and invoiced for the laptop three times. I called, got the two charges reversed, and all was well until a few months later when they sent us to collection over those two refunded charges. Again, called spent about 3 hours playing the phone loop game, but finally got that fixed. For now. We'll see what happens...
Target did this to me years and years ago.
I offered to pay if they wrote an apology and placed it in my credit report, they agreed.
then sent me to a new collection agency.
At this point I refused to pay them. They ate it!
I tried, they failed!
ThinkPads are the best laptops. But I can't say the same for the Lenovo website. I've heard other odd/interesting stories from people that purchased through the Lenovo website. If you don't need a custom configuration, then just buy a pre-configured ThinkPad from a retailer like Amazon or NewEgg.
If you must buy through the Lenovo website, just keep an eye on your credit card or bank statements after you receive your item.
@LupusGray: My monthly credit card bill ranges from $4000 - $7000 or more per month depending on what I had purchased. Almost everything that we purchase goes on a credit card (which is paid in full every month), restaurants, utility bills, grocery stores, misc shopping, gas etc. We review the bill every month to look for charges that seem out of place, but do not necessarially raise a flag if something does not appear on a bill because it will often times show up on the next month's bill. When the next month rolls around, I may not notice or remember that a relatively large ($1000 or so) purchase did not appear on my monthly statement.
I as a consumer authorized payment through my credit card, the seller has the obligation to bill me properly.
One wonders why Lenovo didn't send a 30, 60 and 90 day notice. True, reconciling one's checkbook would have caught the error, but what business does Lenovo have charging the debt off without trying to collect?
Too bad there's not a reverse-collection agency that helps consumers charge companies for not taking payment in a timely manner. My last landlord would hold rent checks for months before cashing them. Headache.
Must agree about buying through Lenovo's website, which is where I purchased my Ideapad in early July. I'm still waiting for them to enter my unit's serial number in their system so that I can register for the "free" Windows 7 upgrade, for which Lenovo says it will charge $17 for "shipping and handling". Pretty expensive for something weighing less than 4 ounces. The notebook itself is OK but the touchpad driver sucks, with well-documented jumping-cursor problems, taps that aren't detected the first time, etc.
Oh dear I am seriously considering ordering a computer soon through the Lenovo website so this is very good to know.
I'd like to know whose computers Lenovo uses for their financial transactions. It simply can't be that hard to have the shipping department computers notify the billing computers, especially since everything is bar coded. Lenovo is probably using Apple equipment. /snark
@MumblesFumbles:
Find a store to buy it from. I bought an Ideapad and love it. It's fast, durable, great on power and very relieable.
Their support was great as well. The gentleman was nice, answered all my questions, and was based in the USA. That last part right there is a huge bonus for me. I bought a part from them, shipped immediately with no troubles.
@TCama: Collection agencies don't always purchase their accounts. It's always possible to turn a debt over to an agency to have them collect, without actually selling it to them. If the agency collects, they typically take a fee out of the amount. With this type of arrangement, the original creditor (Lenovo) would still own the debt; and they can pull the account from the agency at any time.
@MumblesFumbles: How can you seriously be that impressionable? If a single anecdotal story will influence your decisions that drastically (which is fine, though illogical and stupid...), then just know that I've purchased 3 computers and a few accessories from IBM/Lenovo with no problems whatsoever. Guess three good purchases vs. one bad one should be enough to sway your limited thought train back.
Not so much cynical, just uninformed. Some people have many thousands of dollars of transactions each month. While it's certainly a "best practice" to audit everything, when you're handling many different payments and also paying for kids, cars, house, etc, a piddly $1000 is easy to overlook.
@winshape: This isn't new. Phone calls to Lenovo are fruitless. I purchased a laptop and dock some time ago and they never sent the dock. I called, left messages and sent e-mails to numerous people. No response. I filed a chargeback and STILL couldn't get a response and it seems neither could AMEX since they found in my favor. About 9 months later, just when the appeal period for them expired, I get a bill from Lenovo for non payment. "Hello, you never sent me the dock". I ended up dealing with Lyon and although they were slow, they were pretty fair. Its a shape because Lenovo products are great but their customer service doesn't exist.
Since you have an X61, while you get this sorted out, check that your laptop isn't part of the recall.
@eddieck:
Yup, you can either hire a debt collector to collect your debt, or sell them the debt.
The hiring will either be done on a contingency basis, a retainer basis, or a one time service fee basis.
Those were the options offered to my company when we hired debt collectors.
It was the collections company that stated they have a large number of accounts from Lenovo.
@wrjohnston19283: You'd think Lenovo would still catch on. When the account goes to collections, they're buying at a fraction of the original debt. That collection company is probably making a fortune off of Lenovo's sloppy bill-to-pay system.
@shepd: Whichever form the collection takes, Lenovo is losing profit margins due to the fees paid to the collection agencies.
my employer provided me with a lenovo laptop. after that experience, i'll never part with my own dosh for such a piece of garbage. good to know their purchasing system is as inept as their design.
stinkpad used to be an innovative laptop. times change ...
@zacox:
I've decided that balancing paperless statements is a complete waste of time and it harms more individuals than it helps. People lose track because of appearing/ disappearing entries that never make it to the paper statement.
If I use my debit / credit card, my online account shows a debit / hold for the purchase amount. I usually consider the debt paid. However, weeks later my total is out of balance by that amount. There's sometimes a month lag before the actual transaction hits my account, so it makes balancing accounts messy.
I bought a shitload of peonies last August and saw the transaction appear online in my credit account. I received the roots in late September. In early November I saw the line item on my paper statement (with a November billing date). I thought I was being double billed and emailed the company - without editing out my dickishness.
It turns out that I was wrong and I was not being cheated; going through paper statements from my credit account showed only one debit for the transaction. I behaved like an asshole and had to apologize to the company for being stupid and rude.
@wrjohnston19283: It's still coming from Lenovo. You'd think they'd notice that they had to send a bunch of bills to their collections company.
Lenovo's got more problems than just this.. hopefully more stories of their ineptitude will be posted.
"It showed as if they charged me for it for 5-6 days after I bought it, but now I have all the money back in my account, as if they never charged me for the laptop."
This is a symptom of an authorization (commonly called a hold) being placed on your debit card. On a credit card, this typically won't show up as a reduction (increase) in balance, but on a debit card the actual funds are removed from your account by your issuing bank.
From this point, the payee can turn the authorization into a capture and "take" the funds, or they can release the authorization (or simply let it expire.)
Yours seems to have expired without Lenovo ever doing a capture, and so you got the funds "back" from your bank.
This is a common pitfall of debit cards and one more reason to use credit cards, since this could lead to an unintentional overdraft if they re-initiate the transaction later and you don't keep a well-balanced "checkbook" (as it were.)
@winshape: The removal was probably not an actual debit, but an approval to debit (hence that money never really left his account). When Lenovo never actually processed the charge, the approval expired a couple of days later and the money was returned to his available balance.
@Joey_Brill: That's sort of strange. I've had credit cards from all the majors, and I've never experienced that sort of lag on paperless statements. Every charge I expected to appear appeared.
Maybe it is because my solution is using software. I use Microsoft Money, but I suppose Quicken would do just as competent a job. I download the electronic statements into it and let Money take care of the rest. Even so, I'm pretty anal when it comes to my finances. Can we ever really afford not to be?
@MumblesFumbles: Sorry, but that's a fairly silly takeaway. Like another poster said, if you're in the market for a high quality laptop, I would go with Lenovo. I haven't seen a computer company that hasn't been shamed on Consumerist, and at least I can attest that Lenovo products are great!
I've had my Thinkpad T60 for over three years. I've been way happier with my experience with my laptop than friends with Dell, HP or even Apple laptops.
I had a little blue line a few months ago across a bit of my screen (again, I can be very rough on electronics and it was most likely my fault.) It was my first real problem ever with the computer so I called Lenovo to see if anything could be done and they said it was still under warranty (three years later?!). They sent me a prepaid box next day, I sent my laptop in, they repaired it in 3 days, i was able to check online to see the repair progress and they sent it back to me the next day. All in all, the repair took 5 days, cost me nothing, and in addition to replacing the lcd they replaced a bit of the body they said looked worn, which I hadn't even asked about but was a little worse for wear after three years. Great service!
It sounds like the he used paypal, I wonder if that had something to do with it. I'd never use paypal for a purchase like this; I bought a thinkpad from Lenovo's website last year and used my credit card, had no issues.
You shouldn't buy things from Lenovo, but not because of this. Instead, because they have put out notebooks in the past with faulty GPU soldering and never acknolwdeged or resolved the problem for users who had them fail out of warranty.
@bloodnok: A vendor of ours who comes to us regularly has one. He showed it to me and how the pad goes up and down and how big the cracks between the keys are. He said it was a piece of crap. I read all the stories and comments on hardware because I'm thinking about getting a netbook (my laptop is way too heavy to be all that portable). But I think I'll stay away from this one.
It is both peoples faults. The consumer should have checked his statements, BUT Lenovo should have made several contacts first before going to collections. I would have packed the laptop up and sent it back and demand my S&H back.
I was under the impression that being sent to collections didn't automatically impact your credit report unless you ignored them. I've had something similar to this happen before. I paid immediately and nothing has ever shown up on a credit report. I always got the idea that threatening someone's credit was a bargaining chip to get you to pay and that actually going through with it wasn't ideal since that would make many people even less likely to pay. anyone?
I disagree. For example we were at Gap the other day and I bought several pairs of underware that were on sale, but for some reason the man ringing it up only charged me for three pairs instead of four. After noticing the error I let him know what had happened and he charged me for the extra pair. If I had knowingly walked away with merchandice I didn't pay for because of an error, and I KNEW it I would consider myself a theif. I have done it without knowing on occasion and in that case I don't fault anyone it was a mistake on their part and I didn't catch it.
I could never justify keeping something I was supposed to pay for (that I entered into a contractual agreement to do) because the other party messed up. I am still aware of the error and if I did not correct it I am still a theif, even if they were the ones that messed up.
Yes, but it was an oversight on his part, and we'd like to think that it's not his job to make sure that he has exchanged money for a good or service. Optimistic? Maybe.
Sorry,,no, but stupid.
How can anyone NOT know if their charge card has or had NOT been,,,charged? And lastly, it IS the responsibility of the customer to review their own financial statements, not the store, me, or you. If after a maximum of 10 days, the person's card hadn't been charged, he should have called the store and cc company. I know that this dude was looking for a freebie by playing ignorant.
Bart's story is indeed unfortunate and regrettable.
Earlier this year, Lenovo offered PayPal as a method of payment on the Lenovo.com website.
A very small percentage of Lenovo's web orders were transacted via the PayPal method. Some of these orders were released and shipped to customers, however the transactions never completed and Lenovo received only partial or no funds for these affected orders.
Additionally, there have been other cases, that affected Canadian customers, where products were shipped, but the provided form of payment did not clear. Lenovo engaged the Lyons agency to assist in notifcation of customers with affected orders, and to facilitate reprocessing, or alternate method of payment. The intent was for these initial calls to have made on behalf of Lenovo rather than represented as formal collections calls by the agency.
Lenovo has clarified communications procedures with the Lyons agency, and Lenovo sales is now more integrated in efforts in advance of future calls.
Customers who have received a call, or have questions concerning an outstanding balance are advised to call 1-866-426-4004 (Select option 3 for Accounts Receivable) - or fax 845-432-0883 for assistance.
Best regards,
Mark
My takeaway from this... Don't do buy stuff from Lenevo.