Computers: Getting Rid of the Bugs

Angry systems users are taking their complaints to court

When William Selden, a former IBM executive, started his own data-processing firm in 1977, he ordered six Honeywell computers. The first one was delivered to his Rochester headquarters in the spring of 1978, but, says Selden, "it was two months late and dead on arrival." He spent two years trying to get the balky operating system of the computer to function while his infant firm ran up losses that totaled $1.2 million. Selden was forced to liquidate his business and sell the 200-year-old family farm to pay his debts. He is suing Honeywell for $6.4 million for "fraud, negligence and breach of contract." The trial began last week in federal district court in New York City.

The Selden case is by no means unique. As computers proliferate, so, too, do public complaints. Buyers are angry about everything from improper installation and occasional malfunctions to system-wide failure. The victims range from a New Jersey warehouse owner, whose computer system muddled his inventory, to the state of Massachusetts, where 1,150 computers that were supposed to test auto emissions all malfunctioned on the same day because they had been programmed incorrectly.

Though computers solve a broad range of problems for many satisfied users, there are also many hundreds of lawsuits outstanding against manufacturers and sellers. Qantel Corp., a California-based manufacturer of small computers, lost a $5 million lawsuit last spring to a scientific systems firm that accused it of selling computers without the accompanying software. During the trial, the plaintiffs attorney described Qantel computers as "moron machines" that "won't do anything."

The most common complaint is that manufacturers promise more than their machines can deliver. Says Esther Dyson, editor of RELease 1.0, an electronics newsletter: "The industry is raising false hopes. Computers are not user friendly. In fact, they are a pain to operate." Massachusetts Attorney Thomas Christo, who specializes in computer law, says intense competition leads to hard-sell tactics that hurt the customer. Among them: "low balling," that is, selling a computer that has an attractively low price but is too small to be useful, and "bait and switch," trading up a low-balled customer to a more expensive model. Says Christo: "The vendor is the fox among the lambs."

Small customers were once reluctant to sue big manufacturers, but that is no longer true. In 1980 Quality Books Co. of Northbrook, Ill., a publisher and wholesaler, took out an advertisement in the Wall Street Journal to ask if anyone was experiencing the problems it was having with a Burroughs B-800 minicomputer. The company received 400 replies, and is suing for $1.9 million. By the following year, Burroughs acknowledged that at least 160 other lawsuits had been filed by users of the B-800 and similar models. Most of the suits have since been settled out of court.

To avoid problems, some buyers hire outside consultants to advise them on purchases. New York Lawyer Esther Schacter actually tore up a contract a client was poised to sign. Says she: "The worst thing a user can do is to rely solely on the seller." That is a lesson used-car buyers learned a long time ago. ·