VPN firm says it didn’t know customers had lifetime subscriptions, cancels them

"We acknowledge that notifying users after the deactivation was a poor experience ..."

See full article...

 

[balthazarr]

Yes, Australia where the company is based, is indeed a shady country.

I always knew koala bears were super sus. It's the way they just stare at you between naps.

Which company? They claim to be based in the Bahamas. I don't know what Bahamian laws are like, but many of the tax havens are basically closed books, with no extraditions and little recourse from outside the jurisdiction - precisely why the super rich and the VPN operators choose them.

 

[Hacker Uno]

Now I know never to become a customer of VPNSecure.

Thanks!

Switch to a real (and first-rate) VPN service, like Mullvad--based in Sweden, a country with strong privacy protections. Plus, they offer payment means which are potentially difficult to trace to an actual user (RTFP).

I have multiple accounts. They give fantastic support, and you hear from actual developers, not script readers.

 

[waldo22]

You don't just get to keep the assets and ditch the liabilities just because you feel like it.

Sure you can. It's called an asset purchase, and it's the most common form of purchasing a business of this size.

It's generally a bad idea to purchase a corporation, because you would be taking on the liabilities of that corporation. Not just financial liabilities, but legal liabilities as well.

...so you purchase their assets.

Most purchasers know that not honoring gift cards and pre-paid subscriptions would piss of the customers, so they will discount the purchase price by the value of those liabilities and take them on.

These outstanding "lifetime plans" should 100% have been disclosed by the seller, and by not disclosing it they misrepresented their situation.

I don't see how the buyer could have discovered this, even in due diligence, if the seller didn't disclose it.

The problem here is that the purchaser handled the problem in the worst possible way.

 

[Cloudgazer]

They specifically claim to have bought the assets, not the company.

Had they cut off the users immediately then the users would have been very upset at the previous owner of the service, and could have sued the prior owner, and likely won at that point, but against the seller not the buyer (who would have bought … not much, basically computers and some trademarks with very negative reviews).

They can still sue the previous owners, depending on the terms of their contracts the previous owners may have defrauded them. But the amounts probably don't justify the lawsuit.

But they didn’t, so the users clearly have every reason to believe the prior contracts moved over to the new entity, and courts in the U.S. and most other western world jurisdictions are likely to side with the users.

Not sure how you get to that last part.

Do you have a case law cite for a situation like this where a non-party becomes bound to the terms of a contract by failing to stop supplying a service? In any common law country?

There are definitely cases where a party can be estopped from using a termination clause, but in this case there is apparently no contract to terminate, at least not one involving the company in question.

And no, you can't argue that there's an implied contract here because there would need to be an exchange and that hasn't happened, again - not between these parties. The people who had regular service, who kept paying, and who kept getting service can argue that they have an implied contract - but that's legally a very different situation.

 

[Derecho Imminent]

Sure you can. It's called an asset purchase, and it's the most common form of purchasing a business of this size.

It's generally a bad idea to purchase a corporation, because you would be taking on the liabilities of that corporation. Not just financial liabilities, but legal liabilities as well.

...so you purchase their assets.

Most purchasers know that not honoring gift cards and pre-paid subscriptions would piss of the customers, so they will discount the purchase price by the value of those liabilities and take them on.

These outstanding "lifetime plans" should 100% have been disclosed by the seller, and by not disclosing it they misrepresented their situation.

I don't see how the buyer could have discovered this, even in due diligence, if the seller didn't disclose it.

The problem here is that the purchaser handled the problem in the worst possible way.

I think bankruptcy court would take a dim view of company A selling off their assets right before they go out of business. And if company A cannot service those contracts they are claimed to still own then they are out of business.

 

[deadman12-4]

feel I should ask - are they lying and giving and excuse?

 

[Raspberry]

"To mitigate this oversight and honor the lifetime service contracts, we offer the holders of such contracts that we kill them."

 

[Hmm888]

I was going to say they hired Trump's lawyers but even his lawyers found every loophole to get what they want.

In this case, VPNSecure is blatantly lying or simple have inept lawyers. Let the consumer be the judge (sadly—many don't care).

 

[Hmm888]

feel I should ask - are they lying and giving and excuse?

My gut tells me they are lying...

 

[Hmm888]

They get the liabilities only if it was a share purchase as opposed to an asset purchase though. It sounds like this was the latter (and they claimed as much in the email), and the liabilities were left with the old company.

The seller probably can't make money from this but it does ensure the service/business lives at least.

Love your gaslighting!

 

[Hmm888]

According to them anyways, they don't have any of the liabilities and only bought the assets from the old company while leaving the liabilities there. They are a different company afterall than the previous one. Whether what they said can stand in court based on the agreement deal they signed is another matter but they are probably confident in their legal position.

However this is really bad PR wise. I guess they're hoping on this not being heard by most of their customers/boils over soon.

Why do people these days have virtually no skepticism and accept whatever they see at face value without any critical thinking?

 

[Death Or Texas]

I think people weren’t totally used to the grift economy in 2015-2017.

"Caveat Emptor" isn't exactly a novel concept, being coined in Latin and all....

 

[Derecho Imminent]

We didnt buy those contracts - so we're cancelling them.

 

[GrandAdmiralGiladPellaeon]

How can a company buy the assets of another company without getting their liabilities?

Via Asset-Purchase Agreements. There's a few caveats, not limited to Successor Liability (wherein the operations of the business continue without significant change and so the liability transfers, irrespective of the agreement) and further paying a good faith price for the assets.

The original company can sell just the assets and not the liabilities, but they remain on the hook for the contract. So the old company still is required to give you VPN services as per the contract or face breach of contract. I am however not sold on the fact that the price paid was a fair market value. As such the agreement may be found to be fraud.

 

[Deleted member 1085004]

I live in Venezuela. My govt. censors dissenting media. Both in publicly owned ISPs and in private ones. Also intercepts lines.

Cellphone carriers in particular comply to a T. See this example:

https://www.cima.ned.org/blog/la-verdad-del-autoritarismo-digital-en-venezuela/
[spanish, use translation]

There is value in VPNs for many people worldwide beyond watching MLB and Netflix...

Fair enough, I guess I guess I didn't articulate my point enough and didn't mean to make a widespread statement for every use case. In the US a good amount of functionality of the internet has become more difficult to use with a VPN due to security measures or abuse mechanisms. I had a reserve email address with Gmail locked out once I couldn't get to because it was flagged by using a VPN, as well as having my sole phone number in use for verification. I suppose it all depends on use case, but I've noticed over time it becoming more of a pain to enable a VPN with the way certain websites work and wouldn't login to any critical accounts through one.

 

[InfiniteParallel]

Hopefully all the people they screwed will remember that they should report this to their state consumer protection bureau (if it exists), which you can find using the link below:

https://www.usa.gov/state-consumer

As well as their state attorney general, and the FTC.

 

[Derecho Imminent]

Hopefully all the people they screwed will remember that they should report this to their state consumer protection bureau (if it exists), which you can find using the link below:

https://www.usa.gov/state-consumer

As well as their state attorney general, and the FTC.

And a good class action lawyer.

 

[mktogeek]

"We acknowledge that notifying users after the deactivation was a poor experience, and we take full responsibility for that,” a company rep wrote on April 30.

Oh really? Are you taking responsibility for that by reinstating those lifetime accounts, even if for a reasonable time period like a year or two, at no charge?

...

No? Didn't think so.

Taking responsibility is more than lip service. It's taking actions that right the wrongs you've done and make those who were affected whole.

I'm not going to suggest this is 100% on the new owners - it sounds like there was at the very least some lying by omission happening, if not deliberate subterfuge. If the old site never mentioned lifetime accounts, and it took some investigative journalism to even surface a couple examples of where it was done, that's a sticky situation indeed. (One might ask how they never noticed that so many people on the service were not paying monthly, but...) Also, I will grant that a lifetime subscription to a connected service is not sustainable, especially if it's a significant portion of your users - so users expecting literal lifetime service on something that, by its very nature, requires ongoing costs is already unreasonable. But that doesn't change the fact that handling it by first canceling accounts and then later trying to explain it away is not the way you deal with it. (Note that I'm NOT excusing enshittified subscription software, but a VPN service has a real ongoing cost for bandwidth and server hosting so I don't think paying monthly for a VPN is any more unreasonable than paying monthly for your ISP.)

They could have done like I said and given everyone at least one free year. Or they could have even engaged with customers to explain the situation and maybe ask what the customers think is fair to pay before cutting anyone off. Some transparency about how much it actually costs in expenses to host one user for one month would be even better and would strongly encourage people to be fair. So no, I don't blame the company for being shoved into this corner, but I do blame them for how they handled being shoved into this corner.

 

[survient]

I feel like the VPN provider market is extremely oversaturated to the point of doing significant harm of available "quality" options. If it figuratively costs next to nothing to run one and get enough of a profit to be worthwhile, everybody and their cousin will do it without fear of repercussions. The market needs healthy competition but to where these companies are incentivized to provide increasingly robust offerings and not just bottom of the barrel pricing. Not likely to ever happen but wishful thinking I guess.

 

[Eldorito]

Not being aware of a liability is a failure on the part of your auditor doing due diligence prior to the acquisition. Failure to disclose the liability is a failure on the part of the seller. Neither is the fault or problem of the liability itself.

They didn't want to deal with the costs of suing the seller they purchased from so their plan is to instead deal with a class action lawsuit and the loss of reputation their actions have caused?

As a (former) auditor, I think you're overestimating the size of this transaction somewhat. The estimates (which are likely near useless, but the new company used them) say it was worth $200-300k and has revenue of around $100k.

You don't do an audit of a company that size prior to purchase. Your average rental property is worth $200-300k and no one audits those. $100k revenue means there's at best 2 employees. You get your accountant do a run over the books, check out some contracts and receipts and buy it. Might seem lazy, but that's what happens with small businesses. This sounds like it was a one man show, syphoning money in, waiting to do a rug pull.

Much like the class action lawsuit. What lawyer is going to organise that and take it on? We're not talking millions of dollars here that they can take a 10% fee from, there might be a couple of hundred grand of lifetime VPN licenses sold over the years, involving a business now registered in Barbados. There's little guarantee of winning either, without knowing the structure of the transaction it may well be the old owners do still own the liabilities. They're sitting on a pile of cash from the sale that they should be using to pay off those liabilities and they've decided to not do that.

Unfortunately, this is the world of dodgy small businesses. No one sues because it's not really worth it. None of the books are right because no one with any real knowledge is working on them.

 

[terrydactyl]

While suing them should be the remedy, they'll take it to bankruptcy court the second they think the cost of the legal action is too much.

Late stage capitalism: heads I win, tails you lose.

 

[mcswell]

There's a very simple solution to this conundrum: shorten the lifetimes of those customers who purchased lifetime subscriptions.

 

[McTurkey]

Ooo tunnel all of my traffic through a company based in the UAE? And pay for the privilege?

Seriously... those who had their lifetime subscriptions canceled were done a favor.

Which, you know.. why the hell do people use these kind of fly-by-night VPNs? Sure, you're hiding your traffic from someone. But who are you now exposing it to?

 

[balthazarr]

How can a company buy the assets of another company without getting their liabilities?

In exactly the same way you can sell one of your assets - say, your car - without also having to transfer your home mortgage.

Of course, things become more complicated if you have a secured car loan - but there are ways around that, too.

 

[clackerd]

Dear customer,

Our new owners' failure at due diligence is unfortunately on you. This is a dick move, yes, and no, we won't do anything about it. I mean can you blame us? Our new owners didn't even know to ask those types of questions! I mean, would you have thought to ask those questions? Didnt think so. Anyway, your credit card on file has been billed for 6 months of VPN service at the full rate.

Signed,
The VPN Secure Team

 

[FerociousLabRetriever]

Switch to a real (and first-rate) VPN service, like Mullvad--based in Sweden, a country with strong privacy protections. Plus, they offer payment means which are potentially difficult to trace to an actual user (RTFP).

I have multiple accounts. They give fantastic support, and you hear from actual developers, not script readers.

Mullvad is fabulous. I used them for years with minimal issues. High speeds, reliable apps, Transparent and simple pricing, accept standard and near anonymous payments, accounts aren’t linked to emails, etc. Great reputation.

I’ve switched to ProtonVPN recently since it’s highly cost effective as part of their ecosystem, but they don’t go as far for limiting their theoretical ability to link users with their data; your proton account login is the same across services. That being said, they’ve passed multiple audits for no logging. Proton also generally has a strong reputation. But their speeds are less reliable, so I’ve considered switched back to Mullvad.

There are so many dodgy VPN companies out there. It’s a minefield.

 

[panckage]

At first I find it incredible that they wouldn't know, but then I remember the purchasers of OnlyFans decided to ban porn, unaware that it was their primary income stream.

 

[Derecho Imminent]

In exactly the same way you can sell one of your assets - say, your car - without also having to transfer your home mortgage.

Of course, things become more complicated if you have a secured car loan - but there are ways around that, too.

A more apt example would be a house. You cant sell your house if you have a mortgage until you have paid off the mortgage.

 

[balthazarr]

A more apt example would be a house. You cant sell your house if you have a mortgage until you have paid off the mortgage.

That's not quite true - at least not in Australia. It's exceedingly rare, but you can transfer the mortgage along with your house. Of course, the mortgagee has to sign off and agree to the deal, but it is possible.

 

[jock2nerd]

Also this is obviously bullshit, right? Otherwise an incredible business hack would be

1) take out massive loans to build a service

2) sell just the service, without the debt, to another company

3) your company with no service and lots of debt goes out of business

4) go work for the new company with lots of infrastructure but no debt

This was the business model for a lot of gyms, until people got wise and stopped plonking down big upfront membership fees.

 

[jock2nerd]

From TFA: A VPNSecure representative claimed on the reviews site Trustpilot that the current owners “did not gain access to the customer database until months” after the acquisition. According to VPNSecure’s owners, their acquisition netted them “the tech, the brand, and the infrastructure/technology—but none of the company, contracts, payments, or obligations from the previous owners.”

If the new owners claim they didn't buy the liabilities(i.e. the existing subscriptions), what exactly was their plan to obtain cash flow? After all, they just claimed the customer contracts still belong to the sellers. And just how did the sellers expect to service the obligation to provide service if they sold off all the infrastructure to provide that service?

Seems like there is enough fraud and conspiracy to commit fraud charges in this deal to keep prosecutors and investigators busy for years.

I presume they looked at the re-occuring revenue coming in from customers with monthly, quarterly or annual billing.

BTW I don't see any obvious fraud issue here, just carelessness in understanding the customer base and a botched job in dealing with the customers with "lifetime" contracts with the original owner.

No question that they f'ed up the relationship with these lifetime customers.

When you are buying a company worth a few hundred thousand dollars, it obviously isn't economic to spend a greater equivalent amount doing due diligence.

 

[amateurhack]

I can relate to this problem. Back in 2017, I signed up for a $99 lifetime subscription to Pure VPN through stack. The deal was I got signed up for a 5-year subscription, at the end of which I was supposed to go back to the stack website and enter my info and the code they sent me to renew. Of course, after the 5 years was up, they didn't have my info and I couldn't find the code.

 

[Coinneach]

To continue providing a secure and high-quality experience for all users, Lifetime Deal accounts have now been deactivated as of April 28th, 2025.

"We value you as a customer. Also, fuck you."

 

[balthazarr]

I can relate to this problem. Back in 2017, I signed up for a $99 lifetime subscription to Pure VPN through stack. The deal was I got signed up for a 5-year subscription, at the end of which I was supposed to go back to the stack website and enter my info and the code they sent me to renew. Of course, after the 5 years was up, they didn't have my info and I couldn't find the code.

StackSocial are totally dodgy and will lie and make up (or hide) evidence when it suits them.

I signed up to a "get everything for life" deal with a course provider. Once paid and signed up, the deal suddenly changed, and it wasn't everything, it was a limited sub-set of their courses.

I was super sceptical of the deal - so I took screenshots of their site at the time I bought the deal.

When I called them out, they pointed to their updated site to try and claim it was never the deal, and I was mistaken. I emailed with my evidence, but never heard any further.

I involved the Cali attorney general, and SS responded to them along the same lines they responded to me - with bullshit and lies.

I can't remember the exact details, but I couldn't provide my evidence proving SS were bullshitting to the AG because they wouldn't accept documents (or something along those lines), and they didn't follow though and I just gave up as it was too hard to keep on them from half way across the world.

 

[drakefs]

$28 lifetime subscriptions in 2022.

The cheapest lifetime subscription before selling the company. If that isn't padding the numbers, then I do not know what is. Being able to sell your way out of commitments you made doesn't sound entirely legal.

 

[Migz-DH]

I've written something liket his before.
I suspect that I will do so again.

Whoop dee effing doo. Vet your acquisitions better before signing the deal.

They deserve all the grief they can get.

 

[Surtrus]

I am not liable for the loans, rent etc of a cafe if I buy a coffee from them, but I 100% would be if I bought the cafe itself, which is the pertinent analogy.

InfiniteQuant Ltd bought VPNSecure the company, not a single VPNSecure subscription.

In between: you buy all the coffee machines from the cafe, and set up a new cafe in another town. Do you now owe payments on the loans of the previous cafe?

 

[Hydrargyrum]

Did they have customers on monthly payment plans? If so, did they end those contracts or did they keep billing their credit cards on file as usual? I bet I know the answer to that.

If this is actually a real contract (rather than legally marketing puffery) then I would think that those liabilities could only be discharged with the consent of the creditor or under a court supervised chapter 11/7 bankruptcy proceeding. You don't just get to keep the assets and ditch the liabilities just because you feel like it.

If the liabilities truly weren’t transferred in the sale, it would be amusing for the affected customers to take Boost Network to court in a class action with a claim for specific performance of the contract. I.e., force them to spin up a new VPN service to provide those “Lifetime customers” with the promised service.

 

[dragonherder]

They get the liabilities only if it was a share purchase as opposed to an asset purchase though. It sounds like this was the latter (and they claimed as much in the email), and the liabilities were left with the old company.

The seller probably can't make money from this but it does ensure the service/business lives at least.

problem there is they kept billing customers and using the name and running the service so they can't really make the excuse that it was an asset only purchase

 

[Hydrargyrum]

Dear InfiniteQuant Ltd ¿Why the Fark acquire the brand, if you plan to tarnish it?

InfiniteQuant Ltd. failed the due diligence process, and yet somehow, the users suffer the consequences. Should have acquired the tech and the infrastructure/technology, and left the brand in the same place where the liabilities were left.

Having said that, calling customers a liability is telling. Since both customers with lifetime subscriptions and customers with yearly subscriptions which are still running are both liabilities, it seems to me very rich that they are picking and choosing which liabilities to honour...

Having said that, my humble advice:
NEVER EVER BUY LIFETIME ANYTHING
NEVER EVER TRUST LIFETIME WARRANTIES

CONSIDER ANYTHING WITH LIFETIME IN THE NAME AS "LONGER THAN THE COMPETITION YET LESS THAN LIFETIME"

Personally I would normally value a lifetime subscription to a service at approximately 2-3 years worth of subscription fees. If I’m still using the service after that length of time, it’s a good deal.