Wireless company failed to deliver modem, then pocketed my money

Klaus Schuller’s wireless modem doesn’t arrive before his trip to Europe. It doesn’t arrive while he’s in Europe. Instead, it’s waiting for him when he gets home. Why can’t he get a refund for a hotspot he never got to use?

Question: I recently had a terrible experience with a company called TEP Wireless, and I need your help. TEP rents a wireless modem that connects any Wi-Fi enabled device when you’re traveling internationally.

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Two days before a recent international trip, the device had not arrived, despite being booked months in advance, so I contacted TEP via email. They replied promptly that my device would be shipped the next day – which means it would arrive after my departure.

Not good.

I contacted TEP again, and they said “No problem, we’ll ship it directly to your hotel in Europe instead.” Great. Except that it didn’t arrive.

I contacted them again, and three days later they responded, asking for another address to ship it to. My vacation was halfway over at this point, so I declined, and used the hotel’s Internet instead.

When I returned home, the device was waiting for me. In other words, they lied and never shipped it to my hotel.

I asked for a refund since no service was provided, and they hemmed and hawed. Finally, they agreed and I asked for a mailing label to ship the device back to them. They apparently can’t do that for Canadians, so I had to ship it back at my own expense and bill them. I did.

Now, two months later, I still have no refund and am out of pocket the rental and shipping — and they won’t respond to my emails. Not only that, but they also sent me aPaypal invoice for the customs duty on the returned device. Thanks so much for any help you can provide. — Klaus Schuller, Toronto

Answer: TEP should have delivered your wireless modem months before your trip, not while you were on your trip.

The idea behind TEP is pretty clever, when it works. It offers a Wi-Fi hotspot for when you’re traveling overseas and trying to avoid the ridiculously high roaming charges that your wireless company will impose. And believe me, it will.

Of course, that did you absolutely no good. You needed the hotspot on your trip to Europe, not back home in Toronto.

TEP’s refund policy is detailed on its site. You can cancel your booking without penalty seven days before your rental starts. Otherwise, TEP will charge a cancellation fee equal to the greater of either 20 percent of the total rental cost, or $19. All delivery costs and the rental fees for the period you had the device will be exempt from the refund.

But that policy doesn’t address TEP’s failure to send you the device as promised. The way I see it, the company makes an implicit promise to deliver its modem to you before you travel, if not during your trip. If TEP had months to fulfill its order, it really doesn’t have an excuse.

As it turns out, it didn’t have an excuse. Well, kind of.

“We are a start-up company with under 10 employees, and over the past 3 months we have been going through a very drawn out management change and restructing process,” said a company representative. “Unfortunately, in the midst of this, a handful of our refunds have slipped through the cracks, Klaus’ being one of them.”

TEP agreed to refund your purchase immediately.

As a sidenote, it’s difficult to know whether the company you’re dealing with is a multinational conglomerate or a small business, based on its website. TEP’s site looks really professional — better than those of some Fortune 500 companies. But a little due diligence, like running a quick online search for TEP’s customer service complaints, might have made you think twice before giving the company your business.

I’m happy that TEP finally refunded your charges, but it stuck you with the shipping charges. Not the ideal solution, and in your estimation — and mine — too little, too late.

Did TEP offer Klaus Schuller enough compensation?

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63 thoughts on “Wireless company failed to deliver modem, then pocketed my money

  1. These start-up companies have to realize that they are going to lose money on a few customers while they are getting their act together. They cannot expect the customer to absorb the costs of their problems as well as do without the services. TEP is going to find that the negative publicity far outweighs any costs in fixing up the customers affected during this time.
    Indeed, I am experiencing some issues with another seemingly small start-up company although in this case, I expect them to get their issues sorted and have a quite robust product.

      1. The likes of TEP’s response appears their business plan might be short lived…10 EMPLOYEES and a management shakeup? Not good.

          1. If a startup fails there’s usually nothing to cash out. The equity positions are generally useless.

          2. Operative is fails. Cashing out BEFORE failure leaves items for pillaging. Think Titanic. Lifeboats to grab before the ship goes under. Once the vessel sinks, all is lost =).

          3. That’s not how start ups generally work, or at least high tech ones. The participants (founders, employees, etc.) have equity, usually in the form of stock or options to purchase stock, in the corporation. By definition, a start up is not publicly traded. Accordingly, although there are limited exceptions (death and bankruptcy come to mind), as a practical matter, there are no avenues to sell or transfer your equity in the company.

            There is no cashing out. The only real option is walking away, before you put more time and energy into it.

          4. Sure there is man. You can sell equity before the place crashes unless the startup is without concept.

            Stocks (offloaded to co founder, employees investors), etc

            Patents, inventions, proprietary technology, customers can be sold if sole owner and offloaded.

            There are plenty of ways to cut ties for those with ownership stake. Everyone else is screwed though employees are paid til doors shut and can get unemployment.

          5. Sorry man. That is simply not true, not even close to being true. I’ve been representing high tech start-ups in Silicon Valley since 1999.

            Let’s be clear, a high tech “startup” such as TEP is a very specific type of business. Its a corporate entity which raises money in its capital account through the sale of equity to investors. This money is not income. This money can be used to pay reasonable salaries, but otherwise it never flows to the participants until either the business is sold or there is an IPO. And even then, there are often lock-up periods.

            The equity comes with numerous and very severe restrictions, I know, because I”m the one that put them there. Equity owners cannot sell their equity, it’s even on the legend of the issued stock certificates. Furthermore, in most cases, it would be a violation of SEC regulations..

            The company can repurchase the equity from an equity holder. However, if the company is in financial distress, the Board of Directors, in authorizing such a repurchase would have broken its fiduciary duty to the company and may be potentially liable to the company. Not to mention if the company were to enter bankruptcy, that action would afoul of the bankruptcy code and be subject to divestiture by the bankruptcy trustee.

            The entire company could be legally sold, but if it’s on its last legs, it won’t pass due diligence.

            Selling assets, whether tangible such as chairs, or intangible such as IP, is not cashing out before failure. The value of those items is usually independent of the business operation. That’s a normal winding down of business. That’s not jumping ship.

            As a practical matter, if a startup is failing, it is virtually impossible to unload your equity, and if you do, you will likely find yourself dealing with irate creditors, big firm attorneys and the bankruptcy court.

          6. Carver,
            You made no mention of patents, proprietary technology, and inventions. A company might be bankrupt, but patents can be worth a fortune. Before a company goes into bankruptcy, the board or owner can try to offload itself onto another entity.

            Second, writing on the wall might be bad management and impending shakeup. Doesn’t necessarily mean the company has yet entered financial distress. There are plenty of organizations where management is so incompetent, you can literally tell there won’t be a long future ahead.

            They say get out while the going is still good.

          7. I did mention patents, paragraph six “IP” as Intellectual Property which would include patents, trademarks, etc.

            But that is of no consequence. The IP is a corporate asset. Selling the IP would raise revenue for the company. That would in no way enable an equity holder to realize a direct personal benefit from that transaction. Those funds would be used for corporate operations or debts. It would not enable an equity holder to jump ship with any greater wealth.

            As to your second point, yes, I worked for a startup with bad management. My boss, the General Counsel (wonderful guy), as well as the Vice President for Business Development ( another awesome guy), left the company. Three months later I left. As an employee, my equity was in the form on nontransferable stock options which I purchased. The company imploded about 2 years later. The IP was sold in bankruptcy and the funds went to the creditors.

            Let me explain the structure to you. Founders purchase a block of stocks at a pittance. That block of stock is nontransferable. It cannot be sold, mortgaged, hypothecated, etc. except it can be bequeathed. If the founder leaves the company before the allotted time frame, usually 3-4 years, the company has the right to either permit him to keep the shares or repurchase them at the original price, not the market price. Founder’s shares are normally sold for about 1/100 of a penny.

            For example, I purchased 150,000 shares for $15.00. If I bailed after 1 year, the company could force me to return 100,000 shares and give me $10. I would not realize any increase in valuation.

            Employees get stock options. Say 36,000 vesting over three years. If they bail after one year, they can purchase 12,000 or forfeit their shares. These are also non-transferable.

            Sorry, there is no cashing out in a startup such as TEP

          8. I think what you are thinking of is an established business with revenue. That’s a very different story. Say a restaurant that operates as a partnership. (FYI: partnerships are the worse business structures) If one partner wants out, he can force the other partner to either buy him out of liquidate the business.

            That business relationship is fundamentally different, lacking the various lock-up periods and restaints that are standard issue in a startup company, particularly a high tech startup.

          9. Got you. Didn’t know IP, patents, etc were locked up into the equity. So even if a sole owner has developed patents, so long as there are investors, the items belong to the “company” and not the owner? So if X company goes belly up, patents sold off are used to pay debt. … Interesting.

          10. Yup.

            Happened to my first company. It went belly up about 2 years after I left. The OP was sold off in bankruptcy court to pay off the investors. My boss lost 10k, I only lost $650 because I came in much earlier than he did.

  2. Decoding TEP speak…We’re soon on our way out the door and onto the unemployment line. TEP is trying to hold onto as much revenue to postpone our demise.

    Appearances are often deceiving (professional website). A little research goes a long way.

  3. I am trying to understand what that “wireless” modem actually does, without having to dig through that organization’s web site. Given the mention of using the hotel’s wireless Internet as a back-up plan, it sounds like it’s nothing more than a wireless access point, with a SIM for a European cell provider, for Internet access.

    Even if the hotel’s Internet access was not free, I can’t imagine that it would’ve been more expensive than the cost of renting this gizmo. Using this gizmo makes sense if you’re traveling somewhere without readily available Internet access, but I don’t see the market for it otherwise.

    Even the cheapest Android cell phones can broadcast a Wifi hot-spot. Another option would be to grab a second hand, unlocked GSM Android phone off Ebay or Craigslist (making sure, in advance, that it has a hotspot feature, and is a quadband phone that can run off EU frequencies), and buy a local SIM in Europe, for data. Presto, instant local hotspot.

    1. Had the same thought. Prays upon the technophobe. Local sim cards are available in each country visited. Buy an unlocked android from walmart website and pop one in. Presto, you’re in business. Load device with foxfi (no need to root) and now you’ve got a hotspot.

      TEP appears a novel convenience. No need to buy sims or use your data plan. Courtesy of a high wifi device rental fee and exorbinant charges for unlimited data. Can buy a month sim card for 20 euros….their cost 8/day.

    2. Many hotels have pathetic, unusable internet. They may advertise “high speed internet” but the reality is that it is often a source of extreme frustration. Last trip to the UK, two hotels had really great internet (two Marriotts actually – the airport and London County Hall) but the one I had to stay in for 7 days (not a Marriott), although their service was “recently upgraded” was in fact not realistically useable.
      Italy is another country where it is nearly impossible to get a SIM if you don’t live there.
      Still lots of problems with travel and internet, unfortunately.

  4. I travel internationally and love the concept behind TEP. On my last trip with the data turned off on my phone almost all of the time, I racked up $500 in data charges. I would have gladly paid $13 a day for unlimited wireless data (or so they claim but its really only 500 MB a day).

    Having said that… I won’t be giving my business to TEP. Sounds like they are on the edge of going out of business.

    Oh and a little googlefu shows that the OP had what seems to be the standard TEP rental and was not the exception.

    1. Did you check with your wireless provide before you left? NEVER turn on a phone that uses data in another country unless you have a wireless plan. We traveled to Europe in December. Before we left I signed up for the Verizon Global Data plan. It’s $25 for 100MB. Not cheap, but we used nearly 200MB on the trip. Had we not signed up, that would have cost nearly $4000! We ended up paying $50 for the plan and one extension. It was worth every penny for the maps, transit info, and tourism apps, BTW.

      1. The best deal you get in Canada is pretty much $1 per meg in Europe, which is still quite uneconomical although it is better than the $50 per meg a few years ago. Got 10 gigs on EE in UK for I believe £20 and yes, it was LTE, quite quick.

  5. Where’s the Hell No option? 🙂

    I don’t know if they paid with a credit card and if so, the dispute process is the same, but would disputing the charge have been an option? As for not being able to do a prepaid label for Canada? That’s a pile of male bovine excrement. The OP could have found out the cost to return and told TEP to include the amount in the refund and only then would he ship it back.

  6. I’m voting no, because she still had to pay the shipping charges, that is ridiculous in my opinion. She should be refunded those as well. Being a start up is not an excuse, the company didn’t do the one thing they were hired to do, and the OP should not be out any money in this case.

    I am starting to get annoyed by start-ups who demand free things and discounts because they are a start-up. They are just as bad as the entitled travelers demanding first class and free everything. Don’t get me wrong, I have a high respect for start-ups and want them to succeed. But recently when I did private consulting, start-ups would often demand a discount because they were a start-up, or negotiate a rate, and then refuse to pay after I did the work because they are a start-up. I also see start-ups who pre-sell their product, but then never make the product, and refuse to refund the people who bought it. I feel like this entitled start-up mentality is a recent phenomenon. Back in the day, I would offer a discount to start-ups because they were humble and I believed in them, they were always grateful. It was never expected or demanded like it is now.

  7. Long story short: TEP and similar companies prey off technophobes. Go to Walmart’s website, buy an unlocked gsm android, and take the phone to Europe.

    Buy unlimited data sim cards for 20E a month in X country. Download foxfi (no need to root) and turn phone into a mobile hotspot.

    You own the phone, pay no rental fees, and save 100s. Phone is reusable for future travel.

    1. I use my old Blackberry for the same purpose and have amassed a stack of sim cards from many countries this way.
      It works like a charm and sims are often very cheap to acquire – especially in Europe.
      As soon as I land @ LHR, out comes the BB and in goes the UK sim.
      The sims need to be topped off usually within 12 months, or they loose their balance left.

      1. +1. People are nervous to leave home without their cell. Internet has become a must for business and casual travelers, too.

        Unfortunately, it’s easier to fall for marketing gimmicks than to do a bit of leg work. I’m sure there’s a neighbor kid to ask if there’s no tech savvy family member.

        1. To get that offer you have to trade in your phone and buy one from them. T-Mobile sells the phone separate from the service and there is no service contract. Sounds like a good deal unless you have a compatible phone already, like the Nexus 5. Why should I have to trade in my phone and buy the exact same phone back from them? That is going to cost me more than just paying the ETF myself.

          1. Yep, I just read the terms, its a rip off. I can get up to $300 max credit for trading in my old phone (Their estimator said it’s worth $200). Then I sign up for new service (no contract) and buy their new phone for full price. (Their monthly service is only $5 a month less than I am paying now). I then submit proof I paid my ETF and in 8 weeks I get a pre-paid visa, and I also mail in my old phone, and in 3 months I get a statement credit for the $200. I am better off paying the $5 more a month I pay now and getting a new phone every 2 years with the contract.

        2. Tmobile isn’t a bargain unless you can port your own device. You buy handsets at an unsubsidized price for the privelege of no contract. Devices aren’t locked, but those are purchasable on ebay, amazon, or walmart.

          1. I went to Verizon today to check out the Edge program. Biggest ripoff. You pay the full price of the phone over 24 months. Its far better to just take the contract and get a new phone every two years. At least you get the subsidy.

    2. Reasonable option, except in countries, like, say, South Africa, where you have to give a current address (in that country) to get even a prepaid SIM. If the address is a hotel, there are all sorts of extra hoops you have to jump through. It’s crazy.

    3. The local SIM thing is brilliant, but it’s not feasible for everyone.

      For instance: in the UK, you can buy a SIM from a vending machine at the airport, which is officially The Most Awesome Thing.

      But take Barcelona. If you land in Barcelona on a Sunday, there is only one shop in town (a kiosk at Maremagnum) that sells prepaid SIMs, and the people who work there don’t speak English. Even during the week, you have to know that the Vodafone shop two blocks off the Ramblas is the one where people speak solid English. I’ve tried to set up SIM cards across the language barrier a few times and often ended up with completely inappropriate service plans for my use.

      Or China. I went to Shenzhen and bought a SIM card, put it in my phone, and the entire UI was only in Chinese. Not only that: the card wanted me to immediately choose a bunch of service plan options using a text message … in Chinese. I had a business acquaintance set it up for me, but if I had been a pure tourist? What a pain.

      Especially for business travel, where every minute counts and you don’t want to spend three hours going spelunking for SIM cards, I love landing, turning on my Xcom and getting to work.

      1. I could be wrong here, but quite a few airports in Europe sell sim cards. Sim cards can also be purchased online prior to departure, too.

        Check out Lycamobile. They offer service in:
        Australia, Germany, Poland, UK, Belgium, Ireland, Portugal, Austria, Denmark, Netherlands, Spain, France, Norway, and Sweden.
        They’ll mail you a sim card, too. I used voice all over Europe without issue. I kept the Irish Sim Card and loaded with 10 Euros. Only used phone for emergencies. Worked like a charm.

        Locals had nothing negative to say about service. Presume their unlimited 3g data works fine, too.

        1. Not Madrid. Or Barcelona. Or Lisbon. Or Rome. Really, the only places I’ve seen airports selling prepaid SIM cards with decent instructions in English are in the UK and Amsterdam, although I haven’t been to Germany recently, and it seems like something the Germans would do.

  8. There response is garbage. If she really emailed them multiple times with no response that’s not a “refund falls through the cracks” that’s a company avoiding paying a refund plain and simple.

    If you want data abroad, you should do what I do. I had my old phone unlocked by my carrier after the contract was up (or buy unlocked) and when traveling buy a sim card for the country you’re visiting. I just did this in mexico and spent about $30 for 4 weeks of coverage and had 2GB of data. That same service from TEP would have been about $370. I did the same thing in other countries and works great.

  9. It seems entirely possible that the person charged with dealing with this refund left the company and didn’t pass along the info about the refund. That would explain the delay. It wouldn’t explain the refusal to refund the shipping charges.

  10. The OP is nicer than I am. I would have just canceled the charge for failure to perform and they wouldn’t have gotten their device back until they sent me a prepaid shipping label.

  11. A lot of tech companies do not have an office and employees work from home. This makes overseeing their work a lot harder but it isn’t an excuse for not making sure all departments are doing what they are being paid to do.

    What are consumer protection laws in Canada?

    Also, notice that their website doesn’t have a mailing address. That is always a red flag to me NOT to do business with that company.

  12. This company is not a start-up, they’re at least 5-6 years old and I had many dealings with them in the past. It sounds like ownership has changed hands and when that happens, customers usually suffer. I’ve heard nothing but had things lately about them so I no longer recommend them to my readers. Really, it’s pretty affordable to just pick your own mobile WiFi and a pre-paid SIM when you’re traveling or a smartphone. You just don’t need companies like this these days.

  13. I’m the OP. I should indeed have done more research. But the first google search I did brought up a very positive article from PC Magazine about how great the service was. I should have looked further. As for why this service is attractive – I’ve been doing the local SIM thing for years, but when a trip involves multiple countries, some of which you might only be in for a day, the TEP concept becomes more and more attractive. Also, it’s easier to plop down in a coffee shop to answer email and not worry about whether they have reliable (and secure!) wifi. In the end, a case of wishful thinking because of how incredibly useful such a device could be. To add insult to injury, TEP also deducted a cancellation fee from my refund, so I’m actually out more than just the shipping. I’ve continued to try and talk to them, but at this point they’ve just gone silent. I’ve posted warnings on a variety of travel sites and blogs in the hope that others won’t repeat my experience. Thanks to Chris for taking this on!

    1. Very unfortunate. People need to be aware so that when they do research on this company, they know not to deal with them. Have you filed a report with their local BBB?

    2. Did you pay with a credit card? If so, have you tried talking to them about reversing the charge for failure to provide the service paid for? I’m not sure if Canada has something like the US small claims court you could take thwm to?

    3. I noticed endgadet and another tech site gave TEP great reviews. Problem there is companies put on their best face. Look further and find what users say when feasible.

      Best advice is a credit card dispute.

    4. Hi. I’m the reviewer from PCMag (and also a friend of Chris’s.)

      The situation with Tep does show a problem with tech reviews: we request *at most* two or three devices when writing the review, and of course the company knows it’s sending it to a reviewer. So they’re typically on their best customer-service footing, as Justin says below. We’re good at testing products technically – we can assess if the service *works* – but our reviews hit a gap on companies with uneven customer support, which really needs to be tested with a big aggregate of customers. That appears to be the case with Tep.

      At PCMag we try to fill in that gap with something called Readers’ Choice, where we survey tens of thousands of people about things like service and support on everything from their PC maker to their wireless carrier, But we’re only surveying about *big* companies there; we don’t get a picture of support from these smaller firms. I’m sorry that my review led you down a wrong path.

      My suggestion: try Xcom instead. That’s the service I personally use when I’m going on business trips. Or switch to T-Mobile, and you get unlimited roaming data on your phone (but not PC) for free.

      1. Thanks for this comment Sascha. I completely understand – as I know these kinds of new tech & new service article are a big part of specialty magazines. And the reviewer’s dilemma (they know who you are) applies in every industry.
        I wish T-Mobile (or a plan like it) would come to Canada! But the state of the Canadian mobile industry is a topic for a whole new article. Cheers.

      2. Great synopsis Sascha. Might I ask why you don’t tether using unlimited sim cards from x country coupled with an android via foxi? Much cheaper though bit of a hassle.

        One suggestion: Maybe hold off on recommending gadgets until an aggregate of user responses appear on smaller firms. Lay out features, what worked, didn’t work, but refrain from recommending until a track record is built. Can always revisit and post updates to earlier articles. Gives pcmag more journalistic credibility and intregirty knowing recommendations don’t come easy.

        1. Because it is often difficult to find “unlimited” SIM cards. Take Spain, for instance; I haven’t been able to find a prepaid unlimited data plan in Spain. (I usually go for the Vodafone Yu plan with 600MB, but Xcom actually gives you unlimited on their rental hotspots.) Ditto Italy, as far as I know. Also, many of those plans forbid tethering, and then they start charging differently if you go into a different European country … it’s different for every carrier in every country. Simplicity and predictability are what keep companies like Xcom in business.

          1. Check out Lycamobile. They’ll mail out a sim card and offer unlimited 3g. 4g is limited. Used phone as hotspot and good to go. I used lycamobile in ireland. Chared 10e on it. Took to italy, rome, sweden, france, uk, and worked fine. Only used minutes but lycamobile roams. Order a country specific sim and save money. You can do so on their website.

            Voice worked fine. Didn’t try data as I just took emergency phone and used hotel wifi. Howver, their plans include. People seemed to like serivce.

          2. Can you please show me those terms?

            Also, assuming the restriction to be true, Lycamobile services sixteen countries. Solution: Order a sim for the countries one plans on visiting. Odds are, four or five sims in hand, and a huge savings.

  14. Klaus should have been made whole – he shouldn’t be out a penny.And I would also suggest that Klaus find a consumer rating site to post his story – not delivering a paid for service isn’t a small thing and their refusal to refund the shipping speaks for itself – that they aren’t looking down the road at how their policy can cost them much more than the unrefunded shipping cost.

  15. I used TEP services without any problem back in 2011 when I first moved to London. I tried booking their mifi router again for a trip through the Baltics during summer 2013. The router was not delivered because it was not returned by a customer, and it took a long time to get the refund. Although slow to respond, their customer service has been friendly when I managed to get hold of someone on the phone. I was given the same excuse about management changes resulting in slow/missed refunds. I think it was a badly managed company. I probably won’t ever use their services again, but I do hope they clean up their act as they offer a useful service for those who travel and need to stay connected without paying exorbitant data roaming charges.

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