VPN Secure parent company CEO explains why he had to axe thousands of 'lifetime' deals Customers are blasting VPN Secure's new parent company after it abruptly axed thousands of "lifetime" accounts. The reason? The CEO admits in an interview with The Register that his team didn't dig deep enough before acquiring the virtual private network outfit, and simply can't afford to honor those legacy deals. "The …
Because they're also a reputable penis enlargement therapy retailer, and that's a more wholesome pedigree than most VPN providers.
Edit: I went to the site, it's "online only", no "pumps, pills or painful surgery" and once you subscribe you'll get "Lifetime access" to whatever the service is.
Yes, lifetime access.
I went to the site, it's "online only", no "pumps, pills or painful surgery" and once you subscribe you'll get "Lifetime access" to whatever the service is.
Well,it's possible I suppose, that they project that the lifetime of anyone actually using the device won't be very long.
Trust is a quaint ideal like legacy accounts... Sue them. An entity acquires a companies assets and liabilities at acquisition unless explicitly excluded -- that includes legacy accounts.
If there are enough of them to make a case viable, there are plenty of lawyers that will take it. "we didn't dig deep enough" isn't a legal excuse, it's an admission of pre-transaction negligence and doesn't serve as a legal avoidance of the obligation or any company liability.
Seems the CEO is as diligent in his public facing comments as he is in his pre-purchase digging...
Some of us are old enough to remember board wargaming company SPI - dominant in its field for over a decade - having a cashflow issue* in the 1980s.
They got a loan from TSR, original publishers of Dungeons and Dragons, secured on SPI's assets. Some months later, TSR called in the loan, and SPI couldn't pay. TSR ended up with the physical assets and brands but lost huge amounts of goodwill when they refused to honour the lifetime subscriptions to SPI magazines like Strategy & Tactics.
That those subscribers also bought a large number of other SPI games escaped them, and the sector has never really recovered.
* Just how they managed that was fascinating. Thanks to a feedback system, they knew just how well games would sell to their existing customers *before* starting to design them. But they decided on their own that, amongst other things, that the US public wanted a role-playing game on the Dallas TV show. No, they didn't.
The implication of a lifetime subscription is "life of customer". In actual practice, clearly it varies. In one case I have personal experience with, I found out "lifetime" meant "you must renew it for 5 years at a time, and after the first five years you can't renew actually lol hahaha we scammed you and the company that sold it to you on our behalf"
In an assets only purchase, you don't get the name of the company. The new owners negotiated to buy the name too as the was no change in name from the old to new owners. The new owners has every intent to run the company.
If it is true that they failed to do their due diligence and didn't know about the lifetime users, the time to cut them loose was the moment they found out about them, not two years later.
I suspect they didn't kill all the lifetime users then because they wanted to avoid the exact kind of bad reviews they are currently getting with their poorly done cancelling of lifetime users now.
To clarify:
'Lifetime' means whatever the original company meant it to mean BUT it is subject to redefinition whenever the company is sold on.
This is SOP with companies being sold/re-sold in the US of A.
The discounted offer from the 'NEW' company is also subject to change depending on how much extra revenue thet can bilk out of the mugs who risk spending more of their cash wth this company !!!
Best of luck ... BUT I would avoid if I was you as the companies end appears to be on the horizon !!!
:)
Much like Toyota's vaunted timing chain that lasts "the life of the engine". Which is usually a VERY long time with Toyotas, but still, once the timing chain fails, the engine is beyond economical repair.
The repair process (for 2011 model) comes to around 24 hours labor, in a fully equipped shop with lift and appropriate engine table. Actual replacement of the timing chain, once you get to it, is about 30 minutes, but getting in requires "remove most of the vehicle from around the engine, remove the engine, and put it all back on afterwards."
My Dad did a timing belt change on a Nissan Micra a few years back. Unusually for him he initially went to get it done professionally in the first instance but changed his mind when they quoted £1200 for it. Yes changing the belt means getting the engine out but it isn't as simple as lifting it out - you have to drop the engine and then lift the rest of the car from around it.
Sometimes, "lifetime" doesn't even mean the life of the company making the guarantee.
I once worked for a small company providing an online service. It was a good service from a good company and we prided ourselves on doing the right thing for customers. A cash crunch hit, as sometimes happens to small companies, and the board of directors directed us to sell a lifetime unlimited pay-once-use-forever product. We employees objected, the founder objected, but the board got its way. It galls me to admit it but the big cash inflow it brought likely saved the company. For the short term, anyway: of course "pay once, use forever as much as you want" became a dead weight that threatened to sink the company again, worse than the first cash crunch. That's when "unlimited" retroactively got an asterisk, and some of us employees moved on. Since then there's been zero investment in the service and it's only a matter of time before "lifetime" dies, too.
Your comment is ridiculous. If my purchase choice is guided by the vendor telling me something is a “lifetime” service then why shouldn’t I believe that? Why put scepticism above hard facts and a contract?
As it happens I bought one of these “lifetime” VPN deals for $40 a decade ago and have had a great deal of use out of it. I bought it because it was advertised as a “lifetime” deal and I’d estimate it’s saved me around $1400 over a subscription VPN service over that time. And it’s still going. I must be dreaming.
Because, sometimes, people lie. Evidently, some lifetime VPN systems actually work. I would not have predicted that. However, most of them could not afford anything close to that usage, and I'm guessing your provider no longer offers that option and is paying for your usage from subscriptions of others.
For the same reason, when I was recently advertised an Android phone from Aliexpress with 16 GB of RAM, a terabyte of internal storage, running Android 15 on a high-end processor for about £60, I knew that this was not what I'd receive if I chose to buy it. I would have liked that to be true, and I was tempted to order it if only to see what they actually sent as I could always deny payment for the fraud. It's still illegal for them to do that, but it can pay to opt out of a crime at the start rather than hoping that you can recover your investment after it's completed.
I'm all for suing the company, if it works. I don't know anything about the legal merit of this case, but I'd guess it probably won't work. And if even it does, it probably won't hit the scammers who made the original offer.
But generally, if a deal is too good to be true, it's too good to be true. We're absolute suckers for the free lunch and it creates one crazy situation after another. Personally, I'd tend go for the best sustainable deal in this situation, but there's also the let's-see-how-long-we-can-milk-this-cow approach if that floats your boat. But imaging that the unsustainable will continue forever "because advertising" is just nuts. Believing your own dummy spit just keeps the circus going.
There's a great adage in economics: If a trend is unsustainable, it won't continue forever. Corollary: It may continue for longer than you can afford to bet against it.
From the sound of it, the previous owners didn't sell on the liabilities, so either the previous owners still have those contracts and could be pursued for the service, or more likely the previous owners went bankrupt in which case those contracts are probably void*. The new owners would own the domain name, the VPN software, and a list of former customers who can become current customers. Of course, if the rumor that these are the same people is true, that would be fraud.
* Depending on the text of the contract, the insolvency of that original company could probably be argued means the lifetime of the company has ended and thus the contracts expired. If they didn't say that, then the company would simply be unable to meet their obligations and the contract holders would be considered creditors, but given the prices of the contracts, creditors unlikely to ever see any of the money that liquidation generates. Either way, it's not coming back and there's almost nothing you can do about it.
If the new company really provided the service for a year or more for pre-existing customers without setting new terms for years that argument will not be considered to have much merit.
You do not get to claim you're not bound by the original contract because you only bought assets if you continue to provide the same service without negotiating new contracts.
That's what happens when companies merge everywhere, but they are not claiming to have merged. They are claiming to have acquired the assets, not the company, and possibly not all the assets of the old company but just those for the VPN service. If, for example, the old company was going through bankruptcy, it would be normal to sell off the assets to make money to pay for the liabilities if you couldn't find someone willing to take them both. Of course, if a company tried to sell off their assets and not pay their liabilities outside of bankruptcy, that's illegal. Canada isn't special in this case; the same things are legal and illegal there.
That's only the case if you acquired the old company (IE buying their shares). The new company here only acquired the assets, not the old company itself. People need to understand that the assets needed to run a VPN is not the company.
https://lottaccounting.ca/demystifying-business-acquisitions-share-vs-asset-purchases/
"With an asset sale, the buyer purchases ownership of a company’s assets such as inventory, equipment, and accounts receivable and they aren’t responsible for any liabilities associated with the existing business – other than those they deliberately elect to assume. In other words, this purchase method lets the buyer pick and choose which assets to buy and which liabilities, if any, to assume, which in turn limits their risk."
This is a webpage of a Canadian accounting firm explaining the difference between a share purchase and an asset purchase. What the new company did here would absolutely be legal in Canada and most parts of the world.
No, that's not how anything works. If I provide you something that I have no obligation to provide you, I don't automatically adopt an obligation to continue providing it. There's no automatic assignment of liabilities. It's all very explicit in the transfer documents of exactly what they're taking and what they're not, and their later actions don't retroactively change it.
The customers have contracts with the old company, not the new one.
The new company bought the VPN assets from the old company, it did not buy the shares of the old company itself. This is known as an asset only deal. The liabilities are all in the old company.
And yes this is legal in many countries.
If they are, in fact, two independent companies, then there is no case for fraud against the new ones, but depending what happened to the old ones, there might be. If the old ones sold off the VPN business and took the money, that's fraudulent conveyance, and customers and creditors can sue them. If they sold off the VPN business and are still operating, then customers can sue the old ones for breech of contract, depending on what the contract said which might go either way. If the old ones became insolvent, there's no fraud and no case. If the new ones and the old ones are the same people, that's more obvious fraud.
"You didn't do your due diligence, you acquired a company and you acquired its obligations."
They claimed they didn't. They say acquired the assets of the old company, not the shares of the old company.
Here are links to two law firms, one from UK and another from Canada:
https://lottaccounting.ca/demystifying-business-acquisitions-share-vs-asset-purchases/
https://www.solegal.co.uk/insights/share-purchase-or-asset-purchase-whats-difference
And yes, that's a thing in most countries. Asset only deals are advantageous precisely because the liabilities are all left in the old company.
It is possible that the new company are lying but considering asset only deals are common and popular, I don't see it as a hard claim to believe.
I appreciate that there might be reasons for incorporating in the Bahamas, but if you can't find a physical address for your vendor (VPN or otherwise) that makes sense and doesn't feel like the first layer of a tiered shell company cake... Due diligence applies to consumers as well.
That said, the US had plans to force the beneficial ownership of shell companies to be disclosed to the government, but that got killed recently. Wonder why.
They just figured they could claim they didn't and would get away with screwing over the people who had signed up.
What they should do is simply refund them the $27.99. Once they've been made whole for what they spent, I suspect they would not have much of a shot in court. Though if it is true that 90% of their users are lifetime subscribers, that might not be a realistic option.
Of course if that 90% figure is there is ABSOLUTELY NO WAY they couldn't have known - surely the most minimal due diligence would have included "how many subscribers do you have currently" and "what's your currently yearly revenue". Simple math would have told them things don't add up and needed further diligence.
Regardless, it appears the decision is final, and no refunds will be offered to customers. Instead, former lifetime users will be offered discounted plans,
Fool me once, shame on you, fool me twice shame on me
For years, I've told people that "lifetime" deals don't mean your lifetime, but the lifetime of the company. If you pay a lifetime subscription fee to VPN Service 2025 Ltd., and they fold, a new corporation VPN Service 2026 Ltd. can magically appear out of the ashes, and offer you the same service, with absolutely no obligations to you.
VPN Secure could be an excellent service on technical merit, but their blaming the customers for their failure to do proper due diligence puts them firmly in the "companies to not deal with" bin right off the bat.
PureVPN used to offer lifetime VPN service, but just stopped honoring the "lifetime" part at some point. This link to the offer still existed when I posted this: https://www.stacksocial.com/sales/lifetime-of-purevpn It's no longer available for purchase, because PureVPN cancelled all lifetime subscriptions.
Here: https://www.reddit.com/r/PureVPNcom/comments/tn1iks/pure_vpn_cancels_a_lifetime_subscription/ is a nice conversation where people who used to have lifetime subscriptions find out they were only joking.
I had a PureVPN lifetime subscription, and stacksocial did provide a new "lifetime subscription" through another VPN provider, so at least ONE of the companies involved cared about it's customers.
Don't trust any "lifetime subscription" to a VPN, I'm honestly surprised the new VPN I'm using hasn't shutdown all their lifetime accounts yet.
StackSocial has form for being used for clearly unsustainable offerings. The classic example - which I think I have been emailed about by them in the past month - is "lifetime" online backup for not many $s.
I can't remember the company concerned, but a look at the online reviews for the backup company when I first had the offer should have put them off having anything to do with them.
But a percentage of a terrible deal is still money...
I have never worked for BT, but I have worked at BT.
There I noticed an offer to employees of a service (may have been mobile or broadband, I forget) that was very good value, and was for life.
In the (very) small print, it said thst lifetime was defined as being as long as you worked for BT.
I'm not sure if that was corporate arrogance or a death threat. Quit or retire and your life is over.
With that company, either or both were possible.
Lifetime can mean golden handcuffs.
When I did contract work at banks, interest rates were 8%-10%. The bank's employees were offered credit cards at the rate of 5%. Likewise, they were given excellent mortgage rates. Of course, those rates were employee benefits, which they lost if they left. When rates rose, many employees were essentially locked in to the company because of them.
A co-worker was offered a job at another firm at 10% higher salary. He did the math, and discovered that he'd actually lose money if he took it, because his 5% mortgage would have to be renegotiated something like 13%.
Savvier co-workers got their bank to give them the mortgage approval in writing, then went to a competing bank and applied there. When the competing bank offered them 9%, they'd show the 5% offer they had in hand, and the competing bank would often match it. Not only did that prevent them from being tied to their employer, it turned out that if they took the discounted mortgage at their bank, the government considered it a benefit of employment. Specifically, a taxable benefit of employment. So going to the competitor made all sorts of sense.
The lifetime accounts should (IANAA) have appeared as long-term liabilities in the finances of the original company.
Even if the new company was buying only the assets, they'd have looked at all of the financial accounts as part of due diligence.
Either the 1st company was performing accounting fraud, or the new company was negelent when buying.
If this company's customers victims were to all band together, and each contribute 0.5 Euros to a pool, they probably would have enough money to hire Tommy the Torch to track down the InfiniteQuant Board of Directors' houses and burn them to the ground (having first ensured nobody was inside).
"But that would be illegal!"
Yes, yes it would. But when victims have no effective means of obtaining restitution, revenge becomes the second-best thing.
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