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“Inside” the NorVergence Lease Settlements by Christopher Menkin Reaction was “not enough”: “I am not thrilled about the proposed CIT settlements offered to Florida victims. I can't wait too long to decide , will need more legal advise and review where the class action attorney stands.” (name with held ) “Is it just me, or are there others who are happy that all of the AG's are getting the leasing companies to settle, dating back to July 15th, but still concerned (read that unhappy) that 10-15% still to pay to settle is too much? If I were to settle for 15%, I'd still owe more than $10,000. Don't think I'd be all that thrilled having to come up with that and still think I got a great deal. Am I nuts, or are there people just pleased to settle and move on? “ ( name with held ) There were those that thought otherwise: “I am glad to have kept my payments current. I am glad I did not have to try and defend non payment of the lease. It has all worked out and I have learned a valuable lesson regarding the leasing industry. “Thanks to Mr. Kevin Anderson at the North Carolina DOJ and to his boss Mr. Cooper for going to bat for us even though there were not many NC Victims.” (name with held ) At this time, there is no “count” of how many have accepted the attorney general multi-state settlement. There is a procedure for this, which will be included at the end of this article. The guess by experts is that it will be high, many will agree to end the trauma and pay the price to walk away. To say the least, the leasing companies are not happy, either. Many are in denial, and I don't mean in Egypt. Here is a synopsis of the settlement, which is basically 15% of the payments 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. In addition, those who have already made a settlement, may opt to choose these terms and get money back. Meaning if you settled for 40%, you can get it reduced to 15% by joining this settlement. The settlement is retroactive. 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. On the good side for the leasing companies, the agreement does not call for penalties, investigative fees, or other costs incurred by the attorney general offices. It is the common procedure to charge a “punishment” fee. Often it is in the millions of dollars. Since the leasing companies were also considered “victims,” the AGs waived these fees, which they surely could use for their operations or other programs. On the bad side, 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. It becomes a business decision. The multi-state action was trying to be fair to both sides. They faced some tough New York, Boston, Chicago, and other city top law firms, with both staff and financial resources, plus connections. The leasing companies were pushed to their limit as the various attorney generals would agree the were victims, too, but were told they had become “victimizers” in trying to collect money for service that was not there. Leasing News was told it was a matter of a lot of give and take, including giving up costs or “rewards” for their work. The goal was to protect the consumer and business user as equals under the law. In the end, many leasing companies felt it was better to negotiate with the attorney general offices than go through state litigation. “Better” meant the costs involved, the financial and other ramifications of losing, the setting of precedents, and the anger of the law enforcement agencies and future customers, too. Reportedly there were three other leasing companies who had asked to join this specific settlement procedure, but due to the timing involving various states, they were not able to be included. These are still considered to be in the negotiations stage, so no names were mentioned. Particularly missing was the State of California, which was notable by its absence, especially when North Carolina only had 13 consumers. From insiders, North Carolina Attorney General Roy Cooper and his office was not only active in his state, but was one of the leaders in the multi-state alliance. Asked if there were more than three more leasing companies interested in working on a settlement arrangement, Leasing It was explained it was up to the leasing company to approach the attorney general first at this point as they have their cases well prepared and know the situation very well. Leasing News in its editorials has supported and recommended generous settlements to the NorVergence lessees. The leasing companies who don't believe giving up 85% and all costs are on opposite sides of those lessees who don't want to give up 15% for something they did not receive, including their costs, loss of business, and anguish. Both sides should get out of their rut. You have 23 state and District of Columbia top officials who have worked out what they think is the best for all parties. They even gave up charging a fee and their costs to bring both parties together. It is time to move on, get back to business, and take the losses as part of your business expenses---this applies to both sides. December 8, 2004, Pennsylvania Attorney General Gerald J. Pappert brought suit against NorVergence and the officers of the company, including Peter J. Salzano and other defendants to be named. There is criminal action that can be taken in addition to fines and penalties for violation of consumer law. Randy Brooks of the Federal Trade Commission has brought suit against NorVergence, which surely will include officers, and perhaps others involved. It is time for both the leasing companies and the NorVergence lessees to move on, to get back to regular business, and as the person from North Carolina said, “It has all worked out and I have learned a valuable lesson regarding the leasing industry.” Hopefully all those involved have learned their lesson, too. Here are copies of the three settlements, including the forms for those who want to participate in the settlement: http://leasingnews.org/PDF/Wells%20Fargo%20AVC%205-26-05.pdf |
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