Attorney General Eric T. Schneiderman announced a lawsuit against a group of New York City-based business equipment leasing companies that fraudulently siphoned millions of dollars from their former customers, including mom-and-pop stores and other small businesses.
The company denied the allegation and said the opposite was true.
The AG said Northern Leasing Systems and its affiliates, which lease credit card processing machines and other equipment, carried out a deceptive scheme to drain over $10 million in unauthorized debits from the bank accounts of over 100,000 former customers up to 11 years after their equipment leases had expired, ultimately retaining at least $3.5 million.
To disguise the scheme, Northern Leasing and its affiliates, Lease Finance Group, MBF Leasing, Golden Eagle Leasing and Lease Source-LSI used a shell company, SKS Associates, to deliberately mislead customers in an attempt to avoid any harm to Northern Leasing’s business reputation. Tens of thousands of former customers were shocked to discover automatic debits from their bank accounts, by a company they had never heard of.
“These companies engaged in a series of deceptions to squeeze unauthorized fees out of their former customers up to a decade after their contracts expired. We will seek both restitution for defrauded customers and substantial penalties from the companies to ensure justice and accountability prevail,” Attorney General Schneiderman said. “My office will do everything in its power to ensure that New York’s marketplace is honest and fair. Deceptive business practices will not be tolerated.”
To read the announcement on NY A.G. Eric Schneiderman’s website click here.
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