Zer01 Loses $43 Million Lawsuit To MLM Partner For Never Delivering Phones
from the vaporware-scams dept
Remember Zer01? The company that made really quite stunning claims about being able to offer a VoIP-based mobile phone that would offer unlimited voice and data on smart phones for a low price? After some investigations by reporters like Nancy Gohring and our own Derek Kerton it became pretty clear that the whole thing was pure vaporware, tied to a multi-level marketing (MLM) scheme that had a questionable past. It certainly sucked in lots of folks, a bunch of whom showed up in our comments insisting that the phones were real and we’d be proven wrong soon enough. Of course, multiple promised launch dates came and went with nothing to show for it. Laptop Magazine, whose credibility took a big hit, rescinded its “best of show” award for the product, and eventually the company tried to blame everyone else for its problems, suggesting that it was its MLM partner, Global Verge, who was the real problem. Oh yeah, and all those journalists who asked tough questions and weren’t satisfied with the non-answers they received. As part of that Zer01 “dissolved” its relationship with Global Verge (the “parent” operation of Buzzirk Mobile, which was set up to sell Zer01 — or, more accurately, to sell the “dream” of being a Zer01 sales rep, in typical MLM fashion).
Of course, if it was really everyone else’s fault, you would imagine that somewhere along the line, Zer01 would show up with an actual product. One that people could see and actually use — just as Derek had asked to use the “demo” phone at CTIA, a request that was denied. But, of course, none of that happened. Earlier this year, Zer01’s website just disappeared. It also turns out that Global Verge sued Zer01, and has now been awarded $43 million. Of course, considering that Zer01 seems to have disappeared entirely, you can consider that $43 million to be worth about the same as $43 million in Monopoly money. Apparently, Zer01’s boastful CEO, Ben Piilani lost his lawyers after “he stopped replying to contact from his counsel.” In other words, Piilani has disappeared.
Assuming that Piilani doesn’t re-emerge and appeal, then Global Verge may try to take any assets it can, which may include some apparent patent applications that Zer01 claimed it had — though, the details were never explained, so I wouldn’t hold my breath on the actual existence of such patent applications, or the likelihood that they get approved. Of course, as Gohring’s latest piece on the saga points out, many people are still upset with Global Verge for convincing them to sign up to sell these non-existent phones. Global Verge tap dances around all this:
“One of the misnomers out there is that with Zer01 that we were charging people to come into the company to sell the Zer01 service. We never charged any of our distributors one dime for any service or any phones or any of the ability to sell the phones or the service,” he said.
Yet, Robbins himself spoke repeatedly on conference calls for associates last year that were almost exclusively about the Zer01 service and the potential benefits of becoming an associate in order to sell the service.
Robbins maintains that associates who signed up to become part of the marketing program last year did so in order to get other benefits of being part of Global Verge, such as national ID recovery, back-end management systems to manage their businesses, a video conferencing program and travel sites to save money on travel.
Of course, it seems that many of those who signed up don’t agree. Gohring notes that two dozen complaints have been filed against Global Verge to the Missouri state attorney general’s office. Yet another reminder that if something seems to be too good to be true… it probably is.