IT management, MSP

iYogi Faces Potential Default Judgment In $1.2M Lawsuit

iYogi, the embattled IT service provider facing multiple lawsuits, appears to be running out of time in a legal showdown vs. a key plaintiff: Tata Communications. Indeed, a clerk representing U.S. District Court for the Eastern District of Virginia has entered a "default" for iYogi, which apparently failed to plead or otherwise defend itself in a timely manner against the Tata suit, according to a June 14 court filing viewed by ChannelE2E.

Tata Communications  (America) Inc. alleges that iYogi failed to pay numerous telecom invoices. As of January 10, 2016, iYogi owed Tata $1.154 million plus late charges and additional fees, the service provider claimed. Tata is seeking to recover that figure and various fees.

iYogi apparently failed to respond to the suit. Now, company could potentially seek relief from the default, but must provide "good cause" for the failure to answer Tata's lawsuit. Depending on the state, courts often allow additional time before a default judgement is permissible. ChannelE2E doesn't know how much time, if any, iYogi has to potentially seek relief.

Multiple Lawsuits vs. iYogi

iYogi, which offers remote IT support and help desk services, faces lawsuits on multiple fronts. The controversy went mainstream in December 2015 when Washington State filed suit against iYogi, alleging the help desk provider routinely scams customers into buying software and services they don’t need. As part of the lawsuit announcement, Microsoft’s Chief Legal Officer Brad Smith said iYogi is one of the companies that Microsoft receives the most complaints about.

Among the additional cases ChannelE2E has been tracking:

  • Argo Marketing of Lewiston, Maine, is suing iYogi in New York. The lawsuit attempts to collect money owed to Argo by the tech support firm, according The Argo-iYogi relationship had been expected to create 300 jobs in Maine — launching iYogi’s first Global Technology Services Center in North America, but the deal allegedly fell apart.
  • OneCall alleged breach of contract and is seeking $375,583 from iYogi. The suit was filed in the United States District Court for the Southern District of New York.
  • Bankers Warranty Group alleged breach of contract, breach of implied duty of good faith and fair dealing, intentional misrepresentation, quantum meruit, and unjust enrichment. The company is seeking judgment against iYogi for at least $238,791 plus various fees. The suit was filed in the United States District Court for the Middle District of Florida, Tampa Division.

iYogi Class Action Lawsuit?

Meanwhile, multiple sources suggest that iYogi could soon face a class action lawsuit, organized by law firms assisting consumers across multiple U.S. states.

The consumers allege that iYogi has failed to offer contracted IT support services, and the consumers also claim iYogi phone and Internet support lines have been scaled back and/or aren't responsive when consumers seek to end their support contracts.

Still, ChannelE2E has not seen an official class action filing against iYogi in 2016.

iYogi in December 2015 said the Washington State lawsuit was without merit, but the company has since gone quiet on the media front and has not responded to ChannelE2E's request for additional comment.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.