One of the things I’d always done was to look after the photocopiers within the company. My prime aim in life had been to keep the costs down so I bought second hand photocopiers for a song and we used those.
By the early 2000s, the clamour from the offices wanting more up to date machines was deafening. Eventually, I relented and the photocopiers became a function of central administration. Almost immediately Xerox machines began to appear. They were a lot better than the old machines and since I was no longer involved directly I was happy that the situation had been resolved. We had a large balance sheet and the costs the photocopying didn’t really feature.
Eventually, though it became obvious that the photocopying costs we’re becoming excessive and so I got involved again. When we looked at it I calculated the cost to get us out of all of the leases we’d signed and it was well over one million pounds. We had, maybe, 12 photocopiers and that meant that we were on the hook for over £80,000 per machine and we were paying copy charges on top of that.
What happened was that originally the photocopiers deal was fine. Then the Xerox people would come back every couple of months and say that the machine that we had, in say, Southampton was too small for the job and therefore we ought to put a new machine in. The lady in charge thought this sounded reasonable and the cost increase seemed to her not to matter, in fact she scarcely noticed it.
What was happening was that every time we got a new machine the lease on the old machine was rolled into the lease for the new machine but at an astronomically high cost.
We went to Xerox and tried to get a commercial deal to resolve the problem. Their position was that they only wrote the leases. The companies that sold the photocopiers were completely independent although were allowed to use the Xerox name by licence.
We went to a firm of solicitors who consulted a barrister. The barrister was clear that it was a fraud and we would win a court case. The solicitor on the other hand continually said it was a lost cause, we should not pursue it and meanwhile, we should carry on paying the huge photocopying costs, which were running at tens of thousands of pounds a month.
Xerox was adamant that the money was due and that they would not negotiate at all.
And so within a few months, we got into the Birmingham courts. The barrister was still confident. As we sat waiting for this case to begin there was a knock on the door and a representative from Xerox came across and said he thought the case could be solved. The judge by now was already about to start the case. We jointly asked for more time. Xerox then caved in completely and by 10:00 o’clock we were drinking champagne In a local hotel.
In retrospect, it was obvious that we were being ripped off when the local reps appeared in Ferrari’s. When they were asked about it, they all said they had rich aunts who had died and left them the ability to buy a Ferrari. Of course, the rich aunt in question was us. The lesson is don’t think it can’t happen to you because it can.