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NetSuite slapped with fraud lawsuit over 'aggressive' salesman's claims

Chris Kanaracus | May 19, 2014
NetSuite is facing a lawsuit from a skin care product retailer that alleges an overzealous salesman led them to buy a software system that utterly failed to meet its needs.

Bizzaro responded by saying ARB "is and will be a seamless component of your NetSuite experience," it adds.

Shortly after SkinMedix signed the contract, a marketing representative contacted Kozol "to interview him about his experience with NetSuite," the complaint states. Although the system hadn't been implemented, Kozol said positive things thanks to Bizzaro's pledges, it adds.

But it quickly became apparent that NetSuite's system was incapable of delivering what Bizzaro had promised it could, according to the complaint. Rather than sub-second page loads, the website "has demonstrated page loading times of greater than four seconds domestically and seven seconds internationally," it states.

Nor does the site display prices in other currencies, according to the complaint. "The website displays product prices in U.S. dollars only, regardless of which currency a customer selects and regardless of what the page footer states," it states. "This presents a tremendous potential liability for SkinMedix, as its website, as developed by NetSuite, effectively misrepresents product prices to global customers."

NetSuite also failed to meet the August 2013 deployment deadline, according to SkinMedix.

As a result of Bizzaro's claims, SkinMedix has spent more than US$250,000 on a "manifestly unusable" website, the complaint states.

Meanwhile, as Kozol engaged "in the futile process of identifying NetSuites failures and requesting that these failures be corrected," NetSuite published a blog article featuring SkinMedix that described how it "had found success by using NetSuite to support all of its business processes," the complaint states.

The blog also features a screen shot labeled as the site NetSuite built for SkinMedix, but in fact the image was of the company's existing system, it adds.

As of Friday, the blog post remained up on NetSuite's website.

Earlier this year, NetSuite assigned a practice director who was supposed to help fix the site's problems, but the individual was initially unresponsive and later referred SkinMedix "to the same NetSuite project managers who had previously failed to grasp and resolve the problems Mr. Kozol and SkinMedix indentified in 2013," the complaint states.

SkinMedix's suit asks the court to sever its contract with NetSuite, order the return of the money it paid to NetSuite and award compensatory and punitive damages.

Bizzaro, who isn't named as a defendant in the suit, couldn't be reached for comment on Friday.

"Here at NetSuite we strive to provide the best software and services to over 20,000 companies, organizations and subsidiaries worldwide," a NetSuite spokeswoman said in a statement. "We are aware that a complaint was recently filed by [SkinMedix] although we have not been formally served with a copy. We are reviewing the facts and intend to defend ourselves vigorously."

NetSuite has yet to tell its side of the story, but software buyers can take at least one important note away from the dispute.


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