Las Vegas company sues, alleges software glitch

David Strow

Friday, Aug. 13, 1999 | 12:06 p.m.

A Las Vegas mortgage broker sued a Florida software manufacturer, claiming it was sold a software telemarketing system that caused it to run afoul of Nevada regulators.

Global Financial Inc. accused Results Technologies Inc. and sister company Tele-Quote Inc. of Dania, Fla., of consumer fraud, deceptive trade practices, civil conspiracy and racketeering. It requested triple damages in the case.

According to the lawsuit, Global Financial signed a three-year, $150,000 lease to use Results Technologies' system in August 1997. It said it was told the system would allow lower-paid telemarketers to "perform at a level that matches or surpasses the most experienced loan officer."

Once a telemarketer contacted a potential customer, the system was designed to display a credit report, suggest relevant questions, present specific mortgage plans and display an interactive sales presentation. Global said it was told the system could be expected to generate an additional $37,500 in monthly profits. Instead, Global said it spent $217,000 on the system in nine months, and saw only $28,000 in new revenues.

The system broke down in three days, Global claims, and had rampant problems. The calling system would reach a homeowner, hang up, then attempt to call the same number again, Global claims. As a result, Global was threatened with sanctions by the Nevada Division of Consumer Affairs and Sprint Corp., the lawsuit said.

The system also prequalified loan applicants who were later rejected by the system's partner bank, Superior Bank, forcing the company to "explain to approved borrows why they were now unacceptable credit risks, tarnishing Global's business reputation."

Global said the primary reason it contracted with Results was a promise by that company that it would be the first step in becoming a division of Superior. That never materialized; as a result, the lawsuit also named Superior as a defendant for aiding and abetting.

Alan Schein, president of Results, said the problems Global experienced with the system were the result of improper use, rather than widespread bugs. He said the company had attempted to visit Global to help fix the problem, but was denied access.

"It's basically a telemarketing system that helps qualify leads ... but with wrong information, you get wrong output," Schein said.

Schein said some clients were considered being made divisions of Superior, but that never materialized, and wasn't promised to anyone. He also said Global was free to use any lender it wanted; Global claims it was locked into Superior by the contract.

Schein claimed Global had been contacting numerous clients with its complaints, and said the company will file a countersuit.