Posted on Sun, May. 01, 2005

Strand computer company probed

Complaints prompt investigation of Seaside

The Sun News

Nearly 100 complaints filed with the Better Business Bureau against a local computer sales and repair business have prompted a criminal investigation by Horry County Solicitor Greg Hembree.

Hembree said last week that his agency is investigating Seaside Computers Inc., which has five Grand Strand locations. Hembree said he is close to making a decision on the case.

"We're probably at a point where we're going to be reviewing the case to determine if we will bring criminal charges," Hembree said.

Among the potential charges, he said, are obtaining money under false pretenses and breach of trust with fraudulent intent. Hembree said both are considered forms of larceny. Allegations of software piracy also are part of the investigation, he said.

"The software-piracy issue we more than likely will turn over to the federal government depending upon what evidence we have of that," Hembree said.

Horry County records show that Seaside Computers has been in civil court as a defendant 26 times since 2002. There are four additional civil suits filed against the company's registered agent, Mark White. Records also show that six cases have gone on to circuit court. The company has been in business since 2001.

Hembree said his office has received complaints from the magistrate courts, and the Better Business Bureau and others have come directly to his office.

"The challenge that we have in any sort of consumer-related problem is that there is sometimes quite a fine line between what is civil liability and criminal liability," Hembree said. "The penalties are drastically different."

Seaside Computers did not return repeated telephone calls seeking comment in recent weeks. A man who answered the phone at the company's headquarters would give only his first name and said the company's owners weren't available. He would not say who the owners were or answer other questions. The Sun News also made repeated telephone calls to the company's various locations in attempts to locate an owner or manager for comment. Employees at those locations would not answer questions and said they did not know who the owners were.

Consumer complaints

Seaside Computers has an unsatisfactory standing with the Better Business Bureau because of the company's lack of effort to resolve complaints, said John Trudeau, the bureau's local director.

As of April 20, the agency had 96 complaints against Seaside, more than half of which have gone either unanswered or unresolved. Trudeau said 33 complaints are resolved or assumed resolved because the bureau has not heard back from the consumer.

Among the complaints are charges of software piracy, misrepresentation and fraud.

"We have no other computer sales and service company in our area that has this volume of complaints," Trudeau said.

He said attempts to talk with Seaside Computers' management have been unsuccessful.

"It appears that many customers are getting the proverbial runaround when it comes to customer service from this company," he said.

Three of the bureau's complaints involve alleged software piracy, he said.

"We're going to contact the people who alleged there was software piracy and ask them to report to the Business Software Alliance," Trudeau said. "This is a serious matter, and the reporting has to be done by the consumer."

The bureau also will report any violations of what appears to be piracy to the Federal Trade Commission.

As of April 20, 18 complaints against Seaside Computers were filed in Columbia with the S.C. Department of Consumer Affairs.

Although the Better Business Bureau has given Seaside Computers an unsatisfactory rating, the company is not on the Buyer Beware list furnished by the S.C. Department of Consumer Affairs.

Donna DeMichael, the department's director of consumer services, said that is because Seaside Computers has responded to the complaints.

The department has written responses from the company's district manager, Michael McCauley, and from Joan Rogers, a representative of the company's consumer relations department.

"We have always received a response from them even if it's not what the consumer wanted," DeMichael said.

Missing parts

Marie Pratt of Myrtle Beach said her complaints and Seaside Computers' responses have been circulating in DeMichael's office since September 2004.

Pratt said she left her Hewlett-Packard computer with Seaside Computers for repair but was told she would be better off buying a new machine. Pratt spent $629.99 on a new computer and a three-year warranty but took the machine back because it wasn't operating properly and had trouble loading America Online software, she said.

Pratt said she was told the new machine needed $100 worth of new memory. While waiting for the work to be done, she decided to use her old computer but found parts missing.

Information stored on the hard drive also was gone, she said.

"They assured me they would call me before they blew anything out of my computer," she said. Pratt disagrees with Seaside's response, which is that her computer was left for disposal and such machines usually are stripped.

In a more-than-1,000-word contract Seaside prints on the back of its sales slips, the company says it will not be responsible for lost or corrupted data.

Contracts, pirated software

Susan Bracken, a part-time Myrtle Beach resident from Ontario, Canada, said she signed a Seaside Computers sales slip without realizing it also contained a contract, printed on the back of the slip, that doesn't allow consumers to get refunds for defective products or to sue the company.

Disputes must be settled by an arbitrator chosen by the company, the contract says.

The front of the sales slip includes a statement that says that if a consumer signs the slip, he or she has read and agrees to a contract on the reverse side.

Trudeau said the contract "appears to be extremely weighted to the company's side and offers very little recourse, if any, to the consumer."

Bracken said the contract was not pointed out to her and she was not asked to turn the sales slip over.

Louis Burke, a law professor at the University of South Carolina, said that in such a case, the consumer still is bound by the contract and no laws have been broken.

"This kind of strategy is a common one, even with the largest consumer entities in the country," Burke said. "If you've signed something that basically waives all your rights, you're in bad shape."

Burke said some of the other allegations against Seaside, such as removing parts from a piece of equipment left for an estimate, could fall into the category of unfair trade practice if it can be established that such practices are repeated by the company or if intent can be proved.

Bracken said she dropped off her computer at Seaside for virus removal. After she brought the machine home, Bracken said she found all of her programs and files had been erased. Bracken also said a different version of Windows had been installed on her computer.

Bracken said Microsoft's anti-piracy department confirmed through a serial number that the version of Windows that Seaside loaded onto her computer is a pirated version. Bracken said she was told Microsoft would initiate an investigation. Microsoft's anti-piracy department declined to discuss the case.

Cost of piracy

The Software and Information Industry Association estimates that it loses between $12 billion and $15 billion each year because of software piracy, spokesman David Williams said.

Keith Kupferschmid, the group's vice president of intellectual property, said about 200 cases of piracy are reported to the organization monthly, not including Internet cases.

Kupferschmid said consumers should get adequate paperwork and make sure they are given a registration number when they purchase computers.

Civil case launched

Although most of the complaints against Seaside Computers have come from individual consumers, a civil case against the company was filed in January by lawyer Sally Peace of the Battle & Vaught law firm in Conway.

Peace declined to discuss the case.

According to court records, Battle & Vaught said Seaside Computers was guilty of breach of contract, fraud and unfair trade practices. The law firm said it ordered three new Dell computers with Microsoft Office software and two new flat screens, which were to be delivered before Dec. 25. According to Battle & Vaught, three used Dell computers without Microsoft Office software and two used flat screens were delivered Jan. 10.

According to court records, Seaside offered to replace the machines but Battle & Vaught declined. The law firm said it was promised a refund check by Jan. 12 but did not receive the check before filing its complaint.

A settlement was negotiated, and the matter recently was resolved, Peace said.

New ventures?

Mark E. White Jr. is the registered agent for Seaside Computers Inc., according to papers filed with the S.C. Secretary of State. White also is listed as the contact on the business license for Computer Inferno, which opened in the fall in the Pine Lakes area of Myrtle Beach.

According to Horry County records, a business license recently was granted for another Computer Inferno location at 4620 Dick Pond Road. White also is the license owner for that location, which is scheduled to open in June.

The Better Business Bureau and the S.C. Department of Consumer Affairs each have one complaint on file against Computer Inferno.

The bureau's Conway office listed Salvatore McCauley as the principal for Seaside Computers in July 2003, and Michael McCauley was listed as the company's district manager in correspondence sent to the S.C. Department of Consumer Affairs in December 2004.

Until recently, Seaside Computers operated six Grand Strand locations, but its store in the Galleria Shopping Center is closed and signs say it is under renovation.

Horry County records show that the business license for the Galleria location expired at the end of 2003.

Complaints or credibility checksBetter Business Bureau | 488-2227;

S.C. Department of Consumer Affairs | 1-800-922-1594;

To report software piracy

Business Software Alliance | 1-888-667-4722;

Contact KATHLEEN VEREEN DAYTON at 626-0317 or