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Microworkz.com Drops Systems Amid Suit

Washington state charges consumer protection violations; Microworkz focuses on software instead of Webzter woes.

By Cameron Crouch, PCWorld   

Microworkz.com failed to deliver equipment, honor warranties, issue refunds, and respond to customer inquiries about its Webzter computers, according to a suit filed Thursday by Christine Gregoire, attorney general for the state of Washington. The AG's office has received 95 complaints against Microworkz.com this year.

But Microworkz doesn't deny it. The company has already admitted to not complying with the consumer protection act in the areas the Washington AG suit alleges, says Richard Latman, Microworkz chief operating officer. Latman has resigned from Microworkz, effective November 15, but will continue to chair the company.

"We discontinued the Webzter and we do not make or sell computers anymore," he says. "We build the operating system for [Microworkz' newest machine] the iToaster, which is manufactured by someone else." That change occurred in late September, he says.

Repeated complaints from Washington consumers spawned the suit, according to representatives of the attorney general's office. Even before the system started shipping in April, there was concern that Microworkz.com couldn't meet demand for the Webzter PCs, priced from $299 to $699.

Microworkz.com is also being sued by EarthLink Network over a breach of contract; EarthLink Internet access software was to have been bundled with the Webzter PCs, until EarthLink canceled the deal in August.

Refunds Are Coming (Slowly)

Since announcing the Webzter in March, Microworkz has repeatedly been the subject of complaints and company problems. The company has failed to meet demands for the Webzter or honor the $100 service package that promised a Microworkz technician would come to your house to fix any problems. Refunds have been difficult to obtain and in August, the chief executive officer announced his resignation.

For Webzter customers seeking refunds, Latman says, "most consumers who are waiting for refunds have gotten them; this is our cash we're spending to refund them."

Microworkz announced its low-cost iToaster product in June. A $299 non-Windows PC, the iToaster offers basic Web services like e-mail, word processing, and free Internet access from AT&T. Like the Webzter, the iToaster can be purchased for $19.95 monthly.

Although iToaster sounds a lot like the Webzter, Latman emphasizes that Microworkz provides only the operating system and does not sell the PCs directly to consumers.

"We are now a software company and have had nothing to do with hardware for the last 42 days," Latham says. "There are no new consumers buying computers from us."

Latman, who is named as a defendant, suggests that the Washington AG suit was brought about because Microworkz wasn't refunding the money fast enough for Ms. Gregoire. The trial, he says, won't take place until 2001, when this will all be resolved.

As for service agreements, it seems Microworkz.com has posted an out-of-business sign for hardware support.