I asked my local bank, Key Bank, to send me a rep as I wished to include credit card processing to my small computer business in Pawling, NY. As I trusted the bank to be a well-established institution, I didn't question the rep when he told me it would be $49.99 a month to sign up for merchant services. I didn't know any better at the time.

I signed the agreement without really looking at it, because I never would have thought that my own bank would rip me off, and a few days later received the machine. It worked and I was satisfied.

About two days later , I received a letter from a company called Ladco Leasing, stating that I had signed into a four-year lease with them for the credit card processing machine. Being a computer repair shop and having 30 years of electronics and computer experience, I realized that the machine could not possibly be worth almost $2500.

Sure enough, I checked several companies that were selling the terminal and I found that the terminal is worth between $150-$300. Boy was I pissed.

I immediately went online and before I even finished typing "Ladco Leasing" into Google, I saw "Ladco Leasing scam" and "Ladco Leasing complaints" come up in the suggested search box. I couldn't believe that this company was doing this to literally thousands of merchants throughout the country. But they are.

Checking Ladco's website, I found some quite disturbing statements, such as, "LADCO’s programs allow your sales people to increase the profitability of their sale by selling lease payments equal to up to 5 times the actual equipment cost. This added revenue pays for installation, sales costs, bundled services, commissions or simply increases profit." Truthfully, there is no installation. You plug in the machine and it just works. As for sales costs and "bundled services," again, there are none. It's all profit, at the expense of the consumer.

I was appalled. Having some legal experience, I asked my bank rep for a copy of the lease and right on the lease I found several issues. The biggest issue is that there's a purchase option right next to the lease option, but, naturally, the bank reps aren't telling anyone that this is even an option. Also, the lease itself doesn't have a breakdown on it, such as the equipment cost, the interest rate (over 900%) and the final cost to the consumer. Furthermore, Ladco was charging me an extra $6.00 a month on top of the $49.99 because I don't have business insurance yet. I found no mention of this extra charge anywhere on the lease.

In fact, there isn't anything on the lease except the "$49.99 a month for four years," and that's about it. Checking the law, I found that a lease without any details is illegal, and not allowing a customer to purchase a piece of equipment when there is clearly a purchase option and basically forcing them into the lease is also unlawful. The interest rate, being around 900-1000% is far beyond anything in existence, except maybe for loansharking. I'm not even going to go into the insurance charge as it's not mentioned anywhere in any place.

This is a travesty, and something needs to be done about this unscrupulous company that is ripping off thousands of merchants across the country and has forced them into an "uncancellable" lease that is a sham. You are giving Ladco $50 a month for four years for nothing, because at the end of the four years there is a buyout for several hundred dollars, which is the true cost of the machine.

When I gave all this discovered info to my bank rep, he tried to calm me down, but eventually said they would do for me what they normally don't do, and that is cancel the lease. I wasn't surprised, as they don't want too much attention drawn to their little party. I found out also that the bank reps are given a very large kickback for getting the hapless merchant into this sick lease.

I have already filed a complaint with the FTC and I am contacting the Attorney General's office and I have also signed up for a mailing list of other pissed-off merchants and we are going to file a class-action lawsuit against Ladco and Elavon, who apparently owns the company.

A warning to everyone: Do not use your local bank for merchant services. I found a private merchant service that will be selling me the machine outright for around $300 and it will only be $10 a month for statement charges.

It's shameful when a large company is consistently ripping off small business owners throught the U.S. and it only goes to show that a large company like this can get away with just about anything until someone takes them to task on it.

Click Here to read other Ripoff Reports on Ladco Leasing

6 Updates & Rebuttals

Lori B

St. Charles,
Missouri,
United States of America

LADCO IS owned by USBancorp who also owns Evalon

#2Consumer Comment

Sat, March 03, 2012

LADCO is owned by Elavon:

LADCO's domain is LADCO.COM. The registrar is NETWORK SOLUTIONS, LLC (URL http://www.networksolutions.com). Updated Oct. 14, 2011, Expires Dec. 13, 2012. DNS servers are: DNS4.ELAVON.NET, DNS5.ELAVON.NET, DNS6.ELAVON.NET.

Report Attachments

Art M

Stockton,
California,
United States of America

Something is "fishy" about Elavon and LADCO

#3General Comment

Tue, January 31, 2012

I think, my personal opinion, that both of these are "somehow related" and are in business to rip off customers. The Funny thing is that No judge will Dare take the side of the honest consumer. Wonder how much corruption there is in the legal system. In China, fraudsters and companies who defraud are routinely closed down, and the guilty executed. Here, they execute the good honest consumer, and reward the fraudulent guilty. And they bark about the "good American legal system," yeah it is, only if you are rich and powerful, if you are middle class or poor, the chances of you or I winning against Elavon or LADCO are slim to none. And yes, I believe I have been their last victim. I smell and see fraud all over ELAVON and LADCO.

What can I do to remedy this non-stop attacks from these two companies? Any class action suits? I will contact our local DAs office, can they help? or they too are powerless?

Kindly advice.

Alberta Computers

Grande Prairie,
Alberta,
Canada

Ladco is a wholly owned subsidiary of Elavon

#4Consumer Comment

Tue, November 22, 2011

Quote from Elavon Document:

Working Capital Programs Elavon can provide you and your merchants access to working capital. MSP Loan Program - Elavon provides MSPs with working capital through Ladco, our wholly-owned subsidiary

Source: http://www.elavon.com/documents/cp_web/MSP-Fact-Sheet.pdf

We were told by Elavon that if we cancelled the equipment would be taken and released to someone else at no expense to us. We even had them email it to us. Ladco now tells us that they had no right to say that. Even though they own Ladco? Realistically if Elavon makes a promise on behalf of their subsidiary i think it'll stick.

We were able to get out of our Elavon contract when they raised the mechant rates as per new Canadian Legislation. If the processor raises your rates you have 90 days to exit your contract without penalty or expenses. Ladco however says this has nothing to do with the equipment lease.

I'm handing the lease docs and emails from them to the Canadian Federation of Independat Business to see what can be done.

I'll let you all know how it goes.

Anthony Q

Pawling,
New York,
USA

Elavon DOES own Ladco

#5Author of original report

Tue, August 30, 2011

If you take a look at the Knoxville BBB, you will see that Elavon and Ladco are under the same listing. Elavon DOES own Ladco or at the very least Ladco is a subsidiary of Elavon. It's plain to see and it's there as public knowledge. YOU need to get YOUR facts straight. Thanks for nothing!

CCochran

Knoxville,
Tennessee,
United States of America

Elavon doesn't own Ladco

#6UPDATE EX-employee responds

Tue, August 30, 2011

Just so you know, Ladco is their own company. Elavon Inc. does not own them. Check your facts please. Thanks!

Anthony Q

Pawling,
New York,
USA

Ladco Update

#7Author of original report

Fri, April 22, 2011

I recently discovered that Ladco, constantly vigilant against any negative reports on their little game, has removed the text on their website which states, "LADCOs programs allow your sales people to increase the profitability of their sale by selling lease payments equal to up to 5 times the actual equipment cost." Unfotunately for them, I saved the original web page that makes this statement.

They obviously want to dispel as much negative publicity as they can, so they can continue to perpetrate their scam.

Reports & Rebuttal