Fujitsu fights reseller warranty claims with silence

Imagine the anger you could feel as a reseller if you had lost millions of dollars of business due to a flawed series of hard drives — and for several years your suppliers neglected to tell you about a warranty credit system applicable to those faulty products.

You will only be a fraction as angry as Rob Paul, managing director of New South Wales-based reseller Webster Computer Systems Pty. Ltd., or Greg Williams, director of South Australia-based reseller Lincoln Computer Centre. And there are sure to be others.

Both resellers are among those that are able to stay open for business trade despite their disastrous fling with Fujitsu Ltd. and its MPG series of hard drives, but try telling them to look on the bright side. Both have lost hundreds of thousands — if not millions — of dollars in revenue from failed products and subsequent lost customers.

And both just found out that Fujitsu, through its distribution partners and warranty claims partner CSSI, has been for some time offering a warranty credit system for the failed drives. But neither the vendor nor its distribution partners, nor CSSI, has ever had the courtesy to tell them about it.

Webster Computer Systems used Fujitsu MPG-series drives in 550 systems sold to one customer alone. Of these 550 systems, more than 400 hard drives failed.

As of February 2004, Webster Computer Systems had returned 900 drives for repair, many for the second time.

The company could have had a much easier run of things if its distributors, or its vendor partner for that matter, had told the reseller about a warranty credit scheme which, according to Fujitsu Technology Product Group’s Michelle Tan, has been offered for several years.

Webster could have been receiving a credit of US$52 to US$54 per failed drive, rather than continually send drives in to be repaired — drives that tend to ultimately fail again.

“Surely Tech Pac, who we purchased the drives from, or CSSI, who repaired them, could have advised us of the possibility of these (warranty credits),” he said. “We were not told about it.”

Williams said he too had never been proactively advised by Fujitsu distributors Tech Pacific, TodayTech and Hallmark, nor by Fujitsu or its third party warranty supplier CSSI, that warranty credits were an option.

“There must have been 50 or 100 opportunities for them to have offered that — we would definitely have jumped at the dollars,” he said. Webster Computer Systems to date has been footing the bill itself for these failed drives.

“The failures would have cost us A$200,000 (US$147,000) in our engineers’ time alone to go out there and replace the drives,” Paul said.

Webster has since lost its preferred supplier status with the University of Western Sydney. “We are talking a loss of business of about A$1 million annually,” Paul said.

Paul said his company had sent the failed drives to Fujitsu’s outsourcing partner CSSI — who in turn was paid to repair and send back the drive. Several resellers have complained that CSSI makes it very difficult to make a warranty claim.

A spokesperson for Tech Pacific said that he was confident that his predecessor (handling the Fujitsu relationship) would have been informed of the warranty credits and that resellers would have been made aware in due course. “There’s been no issues with it since I have been with the company,” he said. Representatives at Hallmark Computer said they discontinued its relationship with Fujitsu over two years ago.

Representatives from Fujitsu were unable to be contacted prior to this story going to press.

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