Complaint Review: MBF Leasing - Northern Leasing

My company entered into an agreement with MBF Leasing (a.k.a. Northern Leasing) as part of a credit card processing agreement with Universal Merchant Services. Universal told me that we could only get the great rates if we leased the equipment from MBF.

We were to save over $10K per year by switching to their service. The rep from Universal Merchant Services stipulated that his offer for the reduced fees required for us to lease the equipment. Based on the projected cost-savings, I agreed.

Later, I found out that the agreements (credit card purchasing and equipment leasing) were separate. In fact, I did not need to lease the equipment. I called to get out of the lease, but according to MBF, we would have had to buy out the lease. This meant paying $433.48 for 2 terminals for each month remaining on the lease. If I had to do that, I might as well keep paying the lease and have the use of the equipment.

A month before the lease ended, I called MBF to find out how to terminate the lease. They conveyed to me that the lease ended on 7/11/07. I was to send the equipment to 132 West 31st St., 13th Floor, New York, NY 10001 with a letter explaining that I wanted to terminate the lease by 7/11/07. I did exactly that.

There was no mention of a 30-day notice at that time. Note that I was charged on 7/1/07 for a full month, but I only had use of the equipment for 11 days. On 8/1/07, MBF Leasing debited my bank account for another $433.48. MBF told me that because they did not receive the letter until 7/12/07 that MBF could charge an additional month because the lease cancels 30 days after receipt of the termination letter.

Now, they say that the lease actually was due to cancel on 6/28/07 and the letter should have been faxed first and also included with the equipment. This is outrageous that they refuse to credit my company the August payment of $433.48 since MBF gave mixed messages about the procedure of canceling the lease. Over the course of the lease, MBF charged us $10,403.52 for 2 credit card terminals that cost $155.00 each to purchase.

MBF's contract is written in such a way that it is irrevocable by the lessee unless the agreement is paid off in full. Early termination per MBF's contract means the lessor gets paid in full for the entire lease and the lessee loses the equipment.

MBF said that they do not prorate, and the lease terminates on 8/12/07. I did not have the equipment since 7/12/07, but I paid through 8/31/07.

When I asked how much it would cost to buy the machines upon termination of the lease, they said over $2,000. I am not asking for the prorated portion of July that I did not have the machines. I am only asking for $433.48 back for the August debit from my bank account.

As a last ditch effort, I told MBF Leasing that considering all of the complaints found on the Internet it would probably be in their best interest to resolve this amicably. The rep told me that the bad publicity had no bearing on my lease.

I have filed a complaint with New York's Better Business Bureau. I have also contacted Universal Merchant Services, who is responsible for getting my company involved with MBF Leasing in the first place.

I believe that MBF Leasing uses deceptive business practices and its contracts would be found to be illegal if fought in court. I urge you not to enter into any agreement with this company.

Chris
New York, New York
U.S.A.

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