By Dr. Gerard Lozada, Rosedale Vision Center

Does your business use a credit card processor?  If so, you may have signed a lease with one of the subsidiaries of a company based out of New York, N.Y. called Northern Leasing Systems Inc. (NLSI).

In 2003, privacy laws changed and all businesses had to update their credit card processing equipment. Lease Finance Group (LFG), one of the NLSI subsidiaries, came to Rosedale and I signed a 60-month lease in July 2003. There were problems during the lease period, but the biggest problem began once the lease ended.

Unable to find an address to return their equipment, I ran an Internet search using the key words "Lease Finance Group" which produced many web links detailing fraud by this company. The list of their questionable business practices was long and included: deduction of additional lease payments after a lease has expired, businesses unable to prove the return of equipment and then receiving replacement charges of more than $2,000, frequent "robo calls" demanding payment, and LFG damaging its clients' credit.

Using this information, I tried to avoid problems and sent the equipment back via UPS with proof of receipt and put a stop payment on the monthly deductions of the lease payment. According to the service representative who I spoke to, an additional lease payment would be charged within 30 days of receipt of the equipment. I sent the equipment back in early August, which was too late to avoid a September payment and thus I ended up paying an extra two months on a 60-month lease despite not using, nor possessing, the equipment.

In October 2003, Lease Finance Group attempted to deduct an additional lease payment three different times for three different amounts from my business checking account and sent an invoice by mail billing a fourth amount.

I called the phone number on the invoice and was told that the equipment sent back was incomplete and that the lease would continue until everything was returned. Attempts to speak to a supervisor failed and, after running an Internet search using the invoice's address for Lease Finance Group, the name of a medical equipment leasing company – a different division of LFG – appeared for that address. I spoke to Phillip Kaser, the manager of our local Bank Midwest on Rainbow Blvd., and he reminded me that even if I could prove that all of the equipment had been returned, LFG would find a different angle to keep billing.

If any of this sounds familiar to you, please contact RDA so that they can begin to measure the problem locally. Other business owners may think that they are alone, but a quick Internet search shows that these are actually nationwide practices by this company. Even if the name Lease Finance Group does not sound familiar, be careful. The many subsidiaries of Northern Leasing Systems Inc. may have different names, but all use the same fraudulent business practices.

Fortunately, resources are available to help business owners. Several business owners around the country, including a company out of Missouri, have spearheaded a class action lawsuit against Northern Leasing Systems Inc. and its subsidiaries and have started a website,  www.merchantpointofsale.com, which provides many details about the fraud this company regularly commits nationwide, the names of its subsidiaries, and a copy of the 15-count class action lawsuit. 

Remember, if you are a small business owner and find yourself tangled up in this problem, you did not make a poor business decision; you have had fraud committed against you and your business by a company involved in “racketeering and organized crime,” according to the lawsuit.

For more information, visit the following websites: seattletimes.nwsource.com/html/localnews/2008284297_cardtrap19m0.html and www.merchantpointofsale.com/mbfscam/mbfscam.php.