Leasing News 2002 Complaints Bulletin Board Year-End Report
by Christopher Menkin, editor/publisher
Over $300,000 was returned to leasing applicants from “advance
rentals” or “deposits,” primarily from leasing discounters or brokers
with “private label” non-recourse lines of credit.
In the year 2002, Leasing News received 237 complaints sent for the Bulletin
Board. We received so many, we changed the name on the tool bar to “Complaints Bulletin Board. “
Our Web Trend report on visitors to our website www.leasingnews.org shows
“The List,” number one, followed by “Archives,” people doing a search for
a subject or past article, and “Complaints Bulletin Board” is the third most
The original concept in early 2000, was to put an automatic “post” program
on line, but at the insistence of Leasing News Advisor Bob Teichman, we
“screen them,” getting all sides. I am glad we did that. Not just for
legal reasons, but we have been able offset the poor reputation being
made by the few...and get “advance rentals” returned.
Several states have laws regarding “advance rentals,”
but the reality is, when it is less than $1,000, or even a few thousand
dollars, business people don’t have the money to hire an attorney to
pursue their claim. Many have been $10,000 or more, but the business
decision is not to spend $5,000 to chase money they believe they
will never see again.
If there is one observation to make, almost all have made complaints
to the Better Business Bureau. The BBB has been a good source to learn
about how many complaints have been filed against a leasing company Unfortunately, the BBB has no “police” authority. If many of the
businesses were to check out BBB first, they would save a lot
of cash, avoid the frustration and disappoint of not only not getting
a lease for several months, but realizing they had been had.
In almost every case reported to law enforcement, action has been taken, especially when the applicant follows up with the original report. Most people think it is not fast enough. They report if it were “big money,” the law
would make it a higher priority to prosecute. While this may or may not
be true, local law enforcement does follow up. In different states, the
state attorney general’s office are not only active on these complaints,
but have a lot of experience in handling them. The FBI gets involved on the large cases. One thing for sure, once funding sources and others read the
complaint posted in Leasing News, they become very leery about doing business with the broker or leasing company. For this reason alone, Leasing News has been able to get many “advance rental” returned..
We were able to have send back over $300,000 in advance rentals or deposits, some from two companies who eventually made the bulletin board. Only
13 companies were actually listed in 2002. If the money is returned, there is no complaint. 31 the applicant or lessee had signed a commitment letter or paper
(one where we had many complaints, including form ex-employees
and salesmen, had applicants sign a form that any money advance
would not be returned for any reason. Whether this would be legal
in many states, the fact is the applicant was aware they would not
get their money back.) Over two dozen or more were “civil disputes,”
meaning both sides had issues that did not make it clear to us that
the complaint was legitimate. Several we directed to contact
the lessor, or superbroker, or person who made the original commitment.
A few were real disputes, we called a “civil matter,”
meaning for a court or legal arbitrator.
MSM Capital we were able to get back almost $80,000 in advance
rentals before the company filed bankruptcy. In the beginning, MSM
Capital President Michael Cingari said it was his bookkeeping department
or a mix-up in communications, but after about a dozen, it became
clear it was not. The bankruptcy showed creditors owed $1.2 million in advance rentals.
GSC Capital is listed on the Complaints Bulletin Board, the founders of this company have either negotiated
or returned the full amounts of all complaints submitted to them, over $50,000.
The original complaint has been satisfied, as have been all the others received
after it was posted. GSC is no longer in business.
We were also able to get money back in the beginning when the Funding Tree
was first contacted. As the number increased and it became evident money
was not going to be returned, they moved to the State of Nevada.
Many of the complaints are also “miscommunication, “ such as this one from
the new general manager of a mid-city television station:
“I have recently been named General Manager for *****Broadcasting and have found several problems with the leases. Is it legal for Balboa Capital to originate a lease-$73,000-and sell it to Imperial Business for $84,000. I have several "messes" to clean up. Needless to say, "The leasing industry needs to be regulated." No more leases for *****! I have contacted an attorney, but no attorney seems to have an answer. Previous management did sign the contract, but would you like to wake up tomorrow and your mortgage company has sold your $100,000 mortgage to another financial institution, and your principal balance is now $110,000? Legal action should be taken against the leasing industry. If they are protected, we intend to start a national campaign against the leasing industry. I look forward to hearing from you.”
Basically, we explained the assignment of his home mortgage, then the lease
by multiplying the number of payments remaining, adding if the purchase
option was assigned, it may also be added along with late charges, personal
property tax, and the number would be higher that the cost of equipment.
The most important fact is the lease payment did not change. We assured
him it was common for transaction like these to be assigned, went into
a history, and would be glad to contact Balboa to confirm this.
The assignment or problems due to the assignment, especially Advanta and
Textron, have been among the many complaints.
When we first started, most of the complaints to be posted came
from readers, then from “broker” referrals as they were running into
customers with “poor experiences.” 2002 was different.
If we post one complaint, such as about GSC Capital or Leasecomm,
we are found in browsers by people searching for information about
the company. It has come to the point, that the great majority of
communications are not from leasing brokers, although we still
get :”referrals,” but direct from the internet. The browsers have
put Leasing News on the top, especially regarding “advance rentals.” ****
We look at the listing on the bulletin board as a “failure.” We prefer
to see a “settlement,” rather than a complaint..
*** Our F.A.Q. page is near the top for Leasing Company Complaints:
How Do You Handle Accusations About Advance Rentals?
Leasing News does not want to print accusations. We confirm all information given to us before publishing. We verify all information given to us. We want to be "fair and accurate." Our role is industry news. We encourage your communication, but we have an adopted policy from the date of our inception: http://www.leasingnews.org/policy.htm
If you have a complaint or knowledge of inappropriate conduct, behavior, possible illegal activity, the proper venue for this is a written complaint to your leasing association's standards and ethic committee. If the company you are writing about is a member, they may be expelled or censured.
One of the many reasons to belong to an association is to promote ethics and fairness.
Leasing associations have committees composed of professionals in the industry who work for free and consider all written complaints or information about conduct submitted to them.
It is your best "protection." Exchange business with the members of your association.
If there is a difficulty or a problem, you have a "lifeline" to call. Join an association just for this protection (there are other reasons, but this is an excellent one ).
We also invite all readers to utilize our "Customer Complaint" Bulletin Board.