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New Jersey Reaches Additional Agreements
New Jersey Attorney General Peter C. Harvey The New Jersey Attorney General's Office and the Division of Consumer Affairs have reached agreements with seven financial service companies that forgive monies owned by former New Jersey customers of NorVergence, a bankrupt telecommunications firm that discontinued service in July 2004, Attorney General Peter C. Harvey and Consumer Affairs Director Kimberly Ricketts announced. The seven agreements forgive a total of approximately $15.9 million that was owed by 770 former NorVergence customers located in New Jersey. The New Jersey Star Ledger reported:” Newark-based Norvergence collapsed last July, cutting off phone and Internet service to about 9,400 customers nationwide and more than 1,000 in New Jersey.” According to the claim filed in the New Jersey Bankruptcy Court, NorVergence claims they had 11,000 leasing customers in the United Sates. A press release announced the latest agreement with Court Square Leasing. New Jersey also was part of a national, multi-state settlement involving TCF Leasing Inc. that included two New Jersey customers. In addition to Court Square Leasing, which forgave $47,000 to its New Jersey customers, the other companies who have reached settlements (amounts as noted) with Consumer Affairs are: Deputy Attorneys General Lorraine K. Rak, Chief of the Consumer Fraud Prosecution Section, and Jeffrey Koziar represented the State in these matters. According to the Starledger, “Nineteen other leasing companies that hold contracts with about 680 New Jersey Norvergence customers have not reached agreements with the Attorney General.”
NJ Acting Governor Richard J. Codey "These customers, mostly small businessmen and businesswomen, couldn't even get a dial tone but the bills kept coming in month after month. Their credit ratings were at risk and their livelihoods were threatened. Thanks to the understanding and cooperation of these seven financial service companies, we've lifted a tremendous burden from these entrepreneurs and we're again letting them focus on the business of their business," Acting Governor Richard J. Codey said. The financial companies continued to bill NorVergence customers, under terms of the service contracts they bought from NorVergence, though these customers received no telecommunications services following the company's filing for bankruptcy. "These former NorVergence customers, through no fault of their own, were faced with paying for telecommunications services that they were no longer receiving after NorVergence discontinued operations and filed for bankruptcy," Attorney General Harvey said. "These financial companies, which bought long-term service agreements from NorVergence, also were affected by NorVergence's actions." "I want to acknowledge these financial service companies for working with us to provide relief to the former NorVergence customers," Director Ricketts said. "We're continuing to work with other financing companies that bought lease agreements from NorVergence so additional New Jersey consumers obtain relief." NorVergence, which was based in Newark, sold and resold telecommunications services as integrated packages, including local and long distance telephone, cellular telephone and high-speed internet access. NorVergence primarily marketed its services to small businesses and not-for-profit organizations that did not have in-house counsel or technology personnel who could properly evaluate what was being offered. Customers were told that they could save up to 60 percent compared to their current service providers over the term of the NorVergence contract, which was typically five years. Under the settlements with Consumer Affairs, the seven financial service companies also agreed to assist consumers in resolving any adverse credit reports resulting from unpaid NorVergence balances. Late fees or penalties and property insurance charges also will be forgiven. "We believe the settlement is a fair and equitable arrangement for everyone who has been damaged by the Norvergence matter," Wells Fargo Financial spokesman Steve Carlson said in a statement. New Jersey Attorney General Harvey announced January 12,2005, that General Electric Capital Corp and CIT Technology Financial Services agreed to forgive the majority ( nearly $8 million )of payments owed by 525 customers, more than one-third of the roughly 1,450 NorVergence customers in New Jersey. GE has agreed to forgive $3.57 million owed by 270 New Jersey customers. CIT has agreed to forgive $4.36 million owed by 255 New Jersey customers. Meanwhile, Federal Trade Commission Top Equipment Leasing Dragon Slayer attorney Randy Brook is scheduled at 10:00 a.m., Monday, July 18 th to ask Judge Dickinson R. Debevoise, where the FTC is asking for forgiveness of $181,721,914 as the liquidated damages of NorVergence leasing contracts.
Seattle Based Leasing Dragon Killer Randy Brook “As calculated by the FTC after subtracting from the total consumer Injury the cancellation of indebtedness for rental agreements that will be cancelled by this case, the judgment among is $181,721,914.” Although the likelihood of collecting that amount is low; perhaps echoing the states attorney general's judgment in Illinois, Massachusetts, and Texas to void the leasing contracts. The legal jurisdiction and other matters are certainly to be appealed, if granted, as many attorneys believe the move is more posturing, perhaps even “pressure”, to bring the leasing companies to the table. The FTC has accused Norvergence of deceiving customers about the cost savings it could deliver; law enforcement authorities also are investigating the case. The questions still linger about the involvement of 46 leasing companies and their ethical and legal responsibilities. |
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