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The Good, the Bad, and the Ugly--- Here is a synopsis of the settlements with CIT, USBancorp, Wells Fargo, which is similar to other settlements in terms and conditions. The NorVergence lessee is called a “Participating Customer” in the legal documents. The lessor is to mail a letter within a 30 day of the date of the agreement with the attorney general's office with documents and outlining the steps to take. Basically the offer is 15% of the payments owed since July 15, 2004. Wells Fargo works out to be 14% as they could not mechanically use this date, but had to use since July 31, 2004. USBancorp is 15%, except to previously settled customers, where it will be 20%. Those who have settled with Wells Fargo or CIT, can get it reduced to 15% by joining this settlement. For quoting purposes, Wells Fargo is called “WFFL” in the documents. The above means that all personal property tax and insurance premiums that were charged are included. ( CIT is different, primarily in the insurance aspect as it will include only “...33% of all insurance- related charges (‘Cure Amount.”) It should also be noted that CIT is the only one that will “...forgive 67% of any insurance-related charges on the Participating Customer's account that was paid prior to July 15,2004.) Another very good feature is: • The Participating Customer shall either elect to: installment payments. If the Settlement Balance is $5,000 or higher, pay the Settlement Balance in up to twenty-four(24) monthly installment payments. iii. Nothing in this Assurance shall be construed to preclude SFFL in its sole discretion from entering into mutually acceptable alternative payment schedules with any Participating Customer.” Part of it also includes releasing all claims and withdrawing for all law suits involving the creditor. It appears not to include claims against NorVergence itself or agents of NorVergence. 23. a “The thirty-five(35) day opportunity to elect to participate in the settlement described herein in exchange for a release of all claims against WFFL relating to NorVergence. On the bad side, property tax and insurance prior to July 15 or July 30, 2005 for Wells Fargo, is not addressed. As noted earlier, CIT did agree to “...forgive 67% of any insurance-related charges on the Participating Customer's account that was paid prior to July 15, 2004. There may also be lessees who had to increase their insurance premium to their insurance agent to include the equipment in their coverage. This situation would occur if they did not have “room” to include it. In most cases, it would be a minimal amount. While the lessor has agreed to inform all credit agencies and correct any reporting to “settled, “ which is neither positive nor negative on a consumer credit report, “settled” may have another connotation to a lender. As important, those who have had to correct business and consumer credit reports know the information is shared. In many cases, when found, these reports will have to be corrected individually following the consumer or business credit procedure. More than likely, by the Participating Customer. Within sixty days of the effective date, the attorney general is to be informed of the letters sent, providing a list of those whose letter were undeliverable (after making reasonable attempts for correct or new addresses) and an accounting of the Participating Customers, including the Participating Customers' Settlement Balances and payment schedules elected and agreed upon. There are provisions that the lessors are to report every six months until all are resolved according to the agreement. Now the ugly: Included in these settlements are lessees who allegedly never received the equipment, who never had it connected; meaning never had service, but only signed a contract that the leasing company funded NorVergence. There were other odds and ends regarding actual claims of not having service or partial service. Due to the complexity of the negotiations, there was no provision for such “separate” issues. It is up to those in this position to decide whether to accept the settlement or seek remedy in a court of law. The settlement does not resolve issues before the July date regarding personal property tax or insurance premium payments. Note: CIT has made an exception to this in their settlement agreement The settlement most likely will discover differentials in the lease payment schedule that is not addressed in the settlement. For instance, NorVergence may have started the lease 60 days earlier and the bank says there are 38 payments while the lessee records say there are 36 or 34. It appears to waive any settlements or remuneration in a class action suit. --- There will be those receiving money back, who have been making payments. For illustration purposes, here are two numbers: On a $25,000 lease balance, the cost to the lessee is $3,750. On a $35,000 lease balance, the cost to the lessee is $5,250. On a twelve month payment basis ( assuming $5,250 is acceptable:) $312.50 and $437.50 respectively. Depending whether the decision is “political,” meaning the Lessee wants to change the laws, challenge the laws, does not have faith with the attorney general's settlement , the dollar amount is not a deciding matter. Of course, accepting the settlement does not stop the “Participating Customer” from taking part in changing the laws, or challenging the system, but most likely those who don't take the settlement will be utilizing that excuse. To those who look at the situation as a “business decision,” it gets down to what is the best use of your time for you business and family life ---plus your investment or use of money. The decision can also be likened to how you collect delinquent accounts, or determine the costs in trying to collect a bad debt. There are those, mostly new in business, who believe they need to teach someone a lesson, and there are others, who curse the loss of money and view it as a “cost of doing business.” Leasing News has made an editorial stand that our viewpoint is it is best for both sides to accept the Attorneys Generals settlements, which we think are excellent for the consumer side, well constructed, and accomplished in quite a timely fashion. Certainly all sides hopefully have learned a lesson from this experience. http://leasingnews.org/PDF/Wells%20Fargo%20AVC%205-26-05.pdf |
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