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computer guy holding server hostage for non-payment

Posted on 2010-09-20
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Here is an interesting one!  The previous computer company working for my new client X has locked down the server for non-payment for computer services.

Is this legal?  Can a computer company disable a business for non payment? I can "A" reset the admin password with a boot disc.  Or "B", tell them to consult an attorney.  Or "C", walk away from this whole situation.

Which would you do?
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Question by:calljk
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Aeriden earned 336 total points
ID: 33721827
Looking from your client's perspective: Why aren't they paying?  Is the amount worth a fight?  How does it compare to the legal fees they might incur?  How important is the information on the server?  Is there any worry about their consulting a collection agency?

If something like EFS or other hardware or BIOS level encryption isn't used, it may be possible to access the data on its partitions.  And that may be good enough.

If you are the new computer company, I would be concerned about non-payment from this company.  However, they may have very good reasons to not pay.  

As I am not an attorney (and I didn't stay at a Holiday Inn Select, so I cannot play one), I cannot comment on the legal aspect in your client's jurisdiction.
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by:athomsfere
athomsfere earned 332 total points
ID: 33721830
I'd walk away unless they had a real good reason to not pay the last company. It couldn't hurt to reset the passwords... because I can't see what they have done is legal either, and neither is not paying your bills. Its two wrongs headed to small claims most likely.
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by:Lee W, MVP
Lee W, MVP earned 332 total points
ID: 33721895
First, if you want legal advice, consult an attorney.  Treating advice offered here as legal advice is unwise at best.

Second, ask yourself - if they didn't pay the last consultant, why would they pay you?

A few thoughts...

I would NOT take this client on UNLESS ALL payment was in advance.  

The fact that the prior consultant is holding them hostage is suggestive that they are disreputable at best so the withholding of payment COULD be justified.  Nevertheless, *I* wouldn't take the chance and would demand payment up-front.

And while I still say they should be consulting an attorney, I would say it's illegal and your potential client has a possible lawsuit that could demand compensatory damages.  You might want to read this too:
http://www.ktvu.com/news/24545407/detail.html
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by:Alan Hardisty
ID: 33722845
I chuckled to myself when I saw this question - we have a customer over here that is not paying their invoices so we have changed their domain admin password amongst other things.
I totally agree with the advice above.  If you walk away, you will lose a customer and some other IT company will come in and take over from you, so decide if they are worth the hassle.
If you continue to work for the company, as suggested, payment up front for all work.
We had another company we took over the support for in a similar situation and by all accounts, the last IT company were completely useless.  They apparently came in sat down, chatted to staff, drank lots of tea and judging by the lack of updates on the PC's / Server did very little for their money.
I would at least try to find out what the dispute is about before walking away so that you can make a judgement call over the reasons rather than just being scared off, but at least, walking away won't give you any headaches in the future : )
Good luck.
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