What to Know
- The State AG says Northern Leasing is “hijacking” the limited resources of the NY State court system to scam small businesses
- The company and affiliates files thousands of cases every year against small business owners, alleging a violation of terms
- Many of the owners complain they can’t travel to New York to fight the claims or don’t have the money, so they settle to avoid a credit hit
Two Wednesdays every month, a courtroom on the fourth floor of the State Supreme Court building in lower Manhattan is set aside to hear cases brought by Northern Leasing Systems, a Manhattan-based corporation that leases credit card processing equipment.
The state Attorney General’s office says Northern Leasing is “hijacking” the limited resources of the New York State court system.
Civil court records show that Northern Leasing and its affiliated companies file thousands of cases every year against small business owners throughout the country, alleging they have violated the terms of an ironclad lease contract that ensures payment no matter what happens to the equipment.
Many of the owners complain they can’t travel to New York to fight the claims or don’t have money for an attorney. Some just settle the claims to avoid credit problems.
In a civil lawsuit, the New York Attorney General says that Northern Leasing has “engaged in repeated and persistent fraud.”
The attorney general says the firm uses a variety of deceptive techniques through salespeople to induce mom and pop businesses to sign equipment leases. The company obtained more than 30,000 default judgments between 2010-2017.
Northern Leasing has denied the fraud allegations in state court and in federal court in the Southern District of New York, where the corporation is being sued by eight small business owners accusing the firm of a racketeering scheme.
The lead plaintiff, Elaine Aghaeepour of Southern California, said the firm withdrew thousands of dollars from her bank accounts without authorization and ruined her credit. She claims the signature on the contract she supposedly signed was forged and the agreement altered.
“How can you defend yourself against someone who blatantly defrauds you?” Aghaeepour said. “They are in the business of extorting money from law abiding citizens who are just trying to survive and make something of themselves. They victimize people.”
The owners of Renee’s Kitchen, a family-owned eatery in Woodside, Queens, said Northern Leasing collection agents harassed them for months, even after the restaurant returned credit card processing equipment they had leased from another company — equipment that they said was supposed to be free.
“It causes a lot of stress because they kept calling and just harassing us,” said Errol Dizon. “It was very intimidating.”
Dizon says the family fought back legally and even won a small claims court judgement against Northern Leasing.
“How ironic that now, when the tables are turned, they won’t answer our calls," Dizon said.
A spokesman for the Attorney General’s office said they receive complaints daily about Northern Leasing.
Additional attempts to get comment from Northern Leasing were unsuccessful.