Credit Card Machine Renter Sues Small Businesses - NBC4 Washington
Working 4 You

SEND TIPS202-885-4444

Credit Card Machine Renter Sues Small Businesses

    processing...

    NEWSLETTERS

    A company that rents credit card machines to small businesses is being accused of intimidating clients into paying up after "fraudulent" lawsuits. News4's Scott MacFarlane reports. (Published Tuesday, Jan. 19, 2016)

    Thousands of small businesses are squaring off against a huge corporation accused of intimidating clients into paying “unwarranted sums” of money in “fraudulent” lawsuits, which center around machines thousands of shoppers use every day.

    The Manhattan-based firm Northern Leasing Systems rents out credit card processing equipment and agreed in 2012 to settle a civil lawsuit and refund $3.6 million to some clients. The company had been accused of stealing money from customers’ bank accounts, according to the New York State Attorney General.

    Now, Northern Leasing could be headed back to court over new allegations of forgery and a racketeering scheme, according to court documents and attorneys. D.C.-based beauty shop owner Latricia Hardy told the News4 I-Team she also did business with Northern Leasing and feels deceived.

    “It’s hard, but you have to go on,” Hardy said, speaking to the I-Team inside her Capitol Hill salon, on the bottom floor of a building that’s been in her family for decades.

    Hardy said she’s been fighting for several years to keep a judgment Northern Leasing won against her from damaging her credit. That judgment, handed down from New York City Civil Court, told Hardy she lost a lawsuit and owed Northern Leasing nearly $7,000 on a contract she signed to rent the company’s credit card equipment in 2010.

    The problem, according to Hardy, was that she never even knew she had been sued in the first place. Her close friend Edwina Montague tried to help Hardy sort through her legal struggles.

    “She is such a good force in this community,” Montague said of Hardy, describing her friend as a well-known face in the neighborhood. “To see someone like her and have something that negative hit her -- it bothers me."

    Hardy’s contract to rent Northern Leasing’s credit card equipment for 48 months was marked “non-cancelable,” but she said she decided to stop paying for it after two years because her customers at the salon weren’t using credit cards. She said she tried to get out of the contract, writing and calling the company multiple times, and when that didn’t work, they noticed a discrepancy involving the serial numbers on Hardy’s leased credit card machines, Montague said.

    “The equipment that she actually had in no way reflected the numbers on the contract,” Montague said, showing the I-Team photos of the equipment serial numbers that did not match the numbers on Hardy’s contract.

    Montague and Hardy said they told Northern Leasing they thought those details should have voided the contract, but Northern Leasing told the I-Team Hardy confirmed she had all of the correct equipment in a phone call when she first signed her contract in 2010. Northern Leasing also said Hardy was served before the civil court judgment came down, and added:

    “Ms. Hardy is seeking some way to abrogate the lease contract without fulfilling its terms and Northern Leasing has been damaged by her unwillingness to fulfill her responsibilities pursuant to the lease contract. The various judges (including one in Washington, DC where the lessee filed a complaint against us), however, have rejected all of Ms. Hardy’s pleas and have held the lease contract to be valid and enforceable. From a legal standpoint, the lessee has made a number of efforts to vacate the judgment and the courts in both New York and DC have rejected her efforts.”

    The I-Team found Hardy is one of thousands of small business owners Northern Leasing has sued for payments. The company filed 2,300 cases across the country in 2015. New York attorney Krishnan Chittur is now trying to turn the legal tables on the company. He doesn’t represent Hardy, but he has hundreds of other clients and is suing Northern Leasing in three cases in federal court, alleging a racketeering scheme that he says typically involves forgery and fraud.

    “We’ve come across too many of them for this to be coincidental,” Chittur said of the cases involving Northern Leasing.

    Northern Leasing also previously said in a statement that it “prides itself on the fairness of its business practices and open dialogue with lessees.” Latricia Hardy and Edwina Montague told the I-Team they’ll continue to fight to clear Hardy’s credit, and on principal.

    "I'm sure there are a lot of other small business owners such as Ms. Hardy that want to be servicing their community,” Montague said. “It's a shame when that's the backbone of this country, to have them hindered."