Credit Card Terminal Equipment Lease

It looks like they have an extensive history:
http://www.worldlawdirect.com/forum/class-act ... fraud-case.html

BBB report.  Complaints include deceptive sales practices, including predatory cancellation and renewal terms used to block customer attempts to cancel, as well as allegations that they produced "altered" copies different from the ones signed.

http://search.newyork.bbb.org/reports.aspx?pid=44&page=1&id=37657
Business Contact Information

Name:NORTHERN LEASING SYSTEMS INC.
Additional Business Names:Congress Financial Corporation

Golden Eagle Leasing LLC

Lease Finance Group

Lease Source Inc.

MBF Leasing, LLC
Address:132 West 31st St., 14th Floor
New York, NY 10001

Original Business Start Date:1/1/1991
Principal:Jay Cohen, President
Phone Number:(800) 683-5433
Additional Phone Numbers:(212) 457-8506
(212) 239-3500
(212) 216-8356
(212) 216-8216
(212) 216-8404
(212) 216-8320
(888) 275-3251

Type of Business:Business Services (General)

This is NOT a BBB Accredited business

The information in this report has either been provided by the company, or has been compiled by the Bureau from other sources.
Nature of BusinessBack To TopThis company leases various business products, including credit card processing equipment. The majority of complaints against this company pertain to the company's lease, which specifies that the lease cannot be cancelled, and can only be stopped when it is up for renewal. Consumers report that the company does not give sufficient warning of the contract's renewal date, and the lease requires 30 days notice prior to the renewal date in order to cancel it. Many consumers have noted that they either were not given access to the full lease at the time they purchased the company's services, or when presented with a 'copy' at a later date, indicate that the document is different from the one they signed. Consumers report extreme difficulty dealing with customer service, and also indicate that throughout this process the company continues to withdraw fees from their accounts. The Bureau advises consumers to read all leases and written contracts thoroughly and carefully before signing them.

Customer Experience
Based on BBB files, this business has an unsatisfactory record with the Bureau, because there is a pattern of complaints, and the business has not corrected the underlying reason for the complaints.

The company's size, volume of business, and number of transactions may have a bearing on the number of complaints received by the BBB. The number of complaints filed against a company may not be as important as the type of complaints, and how the company handled them. The BBB generally does not pass judgment on the validity of complaints filed.

Complaint Outcome Statistics:Back To TopComplaint Outcome Last 12 Months Last 12..36 Months Total
Resolved
Consumer received the requested resolution 38 58 96
Resolved
Consumer received part of the requested resolution 79 150 229
Administratively Judged Resolved
The Company has responded to the complaint(s) addressing the disputed issues, however, the consumer remains dissatisfied 159 131 290
No Response
The Company has failed to respond to complaints 2 5 7
TOTAL 278 344 622
Complaint Issues:
Please understand that complaints may concern more than one issue

Complaint Issue Last 12 Months Last 12..36 Months Total
Advertising Issues 5 2 7
Billing or Collection Issues 47 0 47
Contract Disputes 137 148 285
Credit or Billing Disputes 25 71 96
Customer Service 0 2 2
Customer Services Issues 7 0 7
Delivery Issues 0 2 2
Guarantee or Warranty Issues 1 2 3
Miscellaneous 1 13 14
Product Issues 6 0 6
Product Quality 2 10 12
Refund Or Exchange Issues 14 0 14
Refund Practices 1 7 8
Repair Issues 1 1 2
Selling Practices 21 66 87
Service Issues 10 20 30
TOTAL 278 344 622
Additional Locations
This firm also does business at the following locations.

525 Campanelli Industrial Drive
..."

Lawsuit filed by Missouri Attorney General:
http://ago.mo.gov/newsreleases/2007/040907b.htm

"April 9, 2007

Firm that leases credit card machines defrauded small businesses in Missouri of thousands of dollars, Nixon says

St. Louis, Mo.— Attorney General Jay Nixon today took legal action against a New York City company Nixon says defrauded dozens of Missouri small businesses that leased its credit card swiping machines. The allegations in Nixon’s lawsuit against Northern Leasing Systems Inc. include charges that the company altered contracts signed by Missouri businesses in order to obligate them to four-year leases that could not be canceled and to pay as much as $4,000 for a machine worth about $300.
...
Northern Leasing advertises itself as a leasing company specializing in financing credit card swiping machines and other business equipment. Nixon alleges the company’s sales staff duped small businesses into entering into four-year leases to pay for the machines, which are typically worth $200-$300, resulting in total payments of $2,500-$4,000.

Many of the small-business owners were misled by third-party vendors into signing contracts they thought would provide them with a wide range of services at $59.99 a month for four months; they later found out that amount only financed the swiping machine itself. To make matters worse, Nixon said, several of the businesses later received copies of their leases with the terms changed from four months to 48 months, and the terms of the leases would not allow the consumers to cancel them during that period.

Northern Leasing also included provisions that any disputes under the contracts would be resolved in court in New York City, where Northern Leasing regularly files its collection suits - making it very difficult and costly for Missouri consumers to challenge the leasing contracts. Missouri consumers who disputed the contracts and didn’t pay the company complained they have been subject to harassing collection phone calls from Northern Leasing both at work and at home, even if those consumers have been defrauded or received nothing of value for their payments.
..."

Settlement reached with Missouri Attorney General:
http://ago.mo.gov/newsreleases/2007/Northern_ ... ary_compliance/

You might also contact FTC, NY AG, and your own state's AG.  

It sounds like what you are saying is that you never leased anything from these jokers at all.  Although this might conceivably be id theft, more likely it is "misidentification" (confusing you with some other sucker they actually set up) combined with their usual pattern of harassment and abuse.  Just because they may be engaging in deceptive sales practices and forgery doesn't mean they can't also be incompetent.  Of course, they are probably telling you they don't have to follow FDCPA, because this is a "business debt", so they get to be as abusive as they want to be.

FCRA still applies if they pull your credit reports without permissible purpose (as they would if you have no connection with the debt), or put anything on them.  Also, Florida state unfair trade practices law may still apply.  Even FDCPA may still apply in the case where you are NOT the business, or even ever associated with the business that incurred the alleged business debt.

There is some case law in support of the FDCPA prohibitions against abusive collection applying to "any person", in particular when they were not (or no longer), part of the alleged business debtor, (it involved a business that went bankrupt and no longer existed, and the debt collector continued to harass the former owners at their residence).  

They may not have as much of a free pass to do anything they want as they think, and as a result they are likely to have racked up a number of actionable violations as they assumed you were their usual small business debtor.  Abusive collection is a necessary part of any deceptive sales con.

Contact the Florida Attorney General.

258 complaint threads on ripoffreport.com, common pattern of complaints.

http://www.ripoffreport.com/reports/0/083/RipOff0083607.htm
http://www.ripoffreport.com/reports/0/294/RipOff0294145.htm
http://www.ripoffreport.com/reports/0/331/RipOff0331396.htm
http://www.ripoffreport.com/reports/0/328/RipOff0328027.htm
http://www.ripoffreport.com/reports/0/268/RipOff0268915.htm

Pursuing an ex-employee who signed on behalf of his employer appears to be part of their M.O.
http://www.ripoffreport.com/reports/0/325/RipOff0325829.htm

Report of a class-action suit against them in New York state.
http://www.ripoffreport.com/reports/0/317/RipOff0317781.htm

Presto, changeo!  One page contract later turns into 4 page lease when they sue.  How do you "read the contract", when it was never presented for signing?
http://www.ripoffreport.com/reports/0/318/RipOff0318226.htm
"...I signed a ONE PAGE lease in October 2000, agreeing to allow them to deduct $65/mo from by business checking account and I also agreed to have the processing company deduct their fees directly from my account.
...
After 8 months of this, calling getting credits and getting the overdraft fees refunded, I had enough. I called the Rep and had her come and pick up the equipment, closed out the bank account and purchased the same equipment that I already paid over $900 for, for $500 dollars. I used my own bank to process the fees and reduced the amount I had been paying by hundreds of dollars per month. Wheeeew! That was the end of that, so I thought.
...
Did not hear another word from them until October 2006, where I received a summons to appear in New York and a claim had been filed against me in the amount of $3,315., attached to the claim was a copy of a FOUR PAGE LEASE, stating that I agreed to have any legal claims heard in New York.
..."

Sounds a lot like the old "gym membership contract" scam, only the product has changed to an overpriced credit card reader, and the "mark" is now a small business person who can also be bullied with threats against their personal credit.

How do they do it?
http://northernleasingsystemssucks.com/Home/N ... fraud+case.aspx

Many complaints of forgery and fraud:

News report of the court's decision:
http://www.worldlawdirect.com/forum/class-act ... aud-case-3.html

"...
In an order signed April 7, Justice Shirley Klein Hetiler also upheld claims for punitive damages because the allegations "address more than a private wrong contending that defendants engaged in a course of conduct throughout the United States with such wanton dishonesty as to imply a criminal indifference to civil obligations." The suit was brought on behalf of four businessmen, Kevin Pludeman of Dallas, Texas; Chris Hanzsek of Seattle, Washington; Sarah Jane Hush and Ozark Granite & Tile Co., Ozark, Missouri and Deninis E. Lauchman, of Gilbertsville, New York.

"Plaintiffs had signed a one-page document, comprising of a lease and personal guaranty, to lease credit card terminals. They were manipulated to sign in a hurry so that at the time of signing, plaintiffs were kept unaware of allegedly additional three pages of the lease or their contents. This experience was uniform amongst unrelated persons across the country," a press release from Chittur's office said. It said the plaintiffs were not alerted to the existence of the other pages or terms after the page on which they put their signatures. The lawsuit said the business owners were not given a copy of the lease but instead asked to call a special number and request for it. In certain cases, the signatures were forged, the suit said.

Northern Leasing electronically deducted much higher sums than those represented in the lease and continue the deductions long after the leases were to have expired, it said.

"When small businesspersons eventually discovered the scam and objected, defendants pointed to lease provisions requiring all legal proceedings to be in New York and other hitherto undisclosed provisions. Intimidated with lawsuits in New York, far away from their regular abode, small businesses across the country were faced with travel and litigation costs which easily exceeded defendants' demands," it said. It said most small business owners succumbed and paid the money demanded. "It is really rare for courts to uphold claims for punitive damages, and hence we are absolutely delighted that Justice Klein has done so," Chittur said.

"We have been contacted by dozens of small businesses all over the country who have been victimized by this scam, and look forward to holding Northern Leasing and its principals accountable in court," he said.

Here is the most pertinent exert from Justice Hetiler's ruling in the Pludeman vs Northern Leasing case:

"As stated earlier, the amended complaint alleges that the plaintiffs were mislead into believing that the four-page lease agreement and personal guaranty was a single page document as both the lease's acceptance and personal guaranty was on the first page; the first page of the document contains nothing incorporating the remaining three pages, which would alert the plaintiffs to the existence of additional pages, the defendant's representatives or salespersons never discussed, mentioned or even referred to the remaining three pages; that they were manipulated into signing in a hurry; that the lease agreement was clipped in a clip-board making it appear that the agreement was a single page document; that they were not given a copy of the lease agreement at the time they singed and that they had to telephone a special number and request a copy.

The law is well settled that a fraud may be committed by concealment as well by positive falsehood or misrepresentation. While mere silence may constitute a fraud if there exists a legal duty to communicate to the other party, the allegations in the amended complaint go well beyond mere silence. In addition to failing to disclose material terms, the amended complaint alleges conduct which might lull a party into a false sense of security that the lease agreement and personal guaranty were a single page document, deliberately concealing the other three pages of the agreement. While it is true that the signature page, contrary to the amended complaint, does refer to paragraph 11, which is found on page three of the agreement, the type size could constitute evidence of intentional deception under such circumstances.

This court finds that the amended complaint sufficiently alleges a cause of action for common-law fraud as against the corporate defendant NLS, pursuant to CPLR 3016(b) as well as the individual defendants based upon the allegations the individual defendants were officers of the corporation and that they participated in the fraud.

Also, contrary to defendants' position, this fraud claim is independent of any contract claim and where a party has fraudulently induced plaintiff to enter into a contract, it may be liable in tort."

The fact that the court upheld the claim for punitive damages was a huge development. That means that the company can be sued for additional monetary damages beyond the scope of the lease term costs.

Also note that, in the case of fraud, the corporate veil of Northern Leasing will not shield its officers and associates from personal liability. Fraud victims will be able to sue them directly.
..."


http://www.worldlawdirect.com/forum/class-act ... aud-case-5.html

"Re: Northern Leasing Systems fraud case

Its very simple. The fact is that the lease contract is "unconscionable". For more information about that and how it relates to MBF Leasing LLC., Northern Leasing Systems Inc., and the many other names this company crookedly and deceptively operates under, check out my webiste:

www.mbfleasing.net
www.mbfleasing.org
www.mbfleasing.info"

"Re: Northern Leasing Systems fraud case

someone please contact me. The filled in 48 m on the terms after I signed the contract. I have a copy of the contract and the line is blank

M@labelledesigns.com

Mamie Adams
Frisco, TX
"

http://www.chittur.com/ActiveCases.php
"...
A putative class action against Northern Leasing Systems, Inc., of New York City, asserting a fraudulent scheme to entrap small businesspersons fraudulently into equipment leases with undisclosed charges and onerous terms. Plaintiffs assert that Northern Leasing deceptively sells these leases to small businessmen through what appears to be a standard form one page lease, complete with signatures, and a personal guaranty. Thereafter, it routinely charges and collects much more than what is specified in the first page, and foists several other liabilities on the unsuspecting small businessmen. When small businessmen raise questions, Northern Leasing finally reveals the existence of 3 additional pages which make the lease irrevocable, onerous, and virtually indefinite. Routinely, these pages and their contents are never disclosed to the small businessmen at the inception, and are not incorporated into the lease. Nevertheless, Northern Leasing saddles small businessmen with all these terms and enforces them strictly. Moreover, Northern Leasing imposes charges which were never disclosed in the lease. The trial court upheld the claim for fraud and punitive damages, ruling that the "allegations address more than a private wrong contending that defendants engaged in a course of conduct throughout the United States with such wanton dishonesty as to imply a criminal indifference to civil obligations." Pludeman v. Northern Leasing. On appeal, the the Appellate Division of the Supreme Court of New York has upheld the claims for fraud against Northern Leasing and its senior management, as well as the claim for breach of contract against Northern Leasing. In addition, the Court also held that "defendants' fraudulent motive and tortious conduct aimed at the public generally suffice to plead a claim for punitive damages under both the breach of contract and common-law fraud causes of action." Pludeman v. Northern Leasing. In light of this decision, Plaintiffs have renewed their motion for class certification which motion is now pending. Meanwhile, the individual Defendants, i.e., senior management of Northern Leasing, appealed to the Court of Appeals (New York's highest court) seeking dismissal of the fraud claims against them. That Court affirmed the decision of the Appellate Division, and upheld the fraud claims against Northern Leasing's top management Pludeman v. Northern Leasing


A racketeering action against Northern Leasing Systems, Inc., alleging a racketeering scheme to intimidate out-of-state individuals into paying unwarranted sums of money by commencing fraudulent lawsuits in New York City Civil Court. Claiming to be financiers under alleged equipment finance leases, Northern Leasing brought actions seeking to recover relatively small sums, typically under $3,000. However, Northern Leasing was aware well before bringing such actions that the out-of-state individuals' signatures on such leases had been forged. Nevertheless, Northern Leasing commenced these small claims proceedings and even obtained fraudulent default judgments in order to harass, intimidate, and thereby extort money from out-of-state individuals through threats of expensive long distance litigation, of damage to credit rating, and/or entry of default judgments. Defendants have sought dismissal of the claims, which motion is now pending.
..."