After being accused of stealing money from customers’ bank accounts by the New York State Attorney General in 2012, Northern Leasing Systems, a Manhattan-based corporation, agreed to settle a civil lawsuit and refund $3.6 million. Three years after that settlement, accusations of forgery and fraud are stacking up against the firm, which leases credit card processing equipment.
After being accused of stealing money from customers’ bank accounts by the New York State Attorney General in 2012, Northern Leasing Systems, a Manhattan-based corporation, agreed to settle a civil lawsuit and refund $3.6 million. Three years after that settlement, accusations of forgery and fraud are stacking up against the firm, which leases credit card processing equipment.
The firm has an “F” rating with the Better Business Bureau.
Tricia Lowther runs the Children First Academy in Canarsie. Her dreams of expanding her school have hit a roadblock because of credit problems.
“We want to expand but can’t because I don’t have credit,” she said.
Lowther claims credit card processing equipment she leased in 2008 from a representative from Northern Leasing was faulty, so she stopped paying the remainder of the 48-month contract.
“[The equipment] is not working, so why must I pay for something that is not working,” Lowther told the I-Team.
Northern Leasing says the contract Lowther signed was non-cancelable, sued her and won a default judgment for $1,875. The firm says she never complained about the equipment.
The small business owner is one of thousands of defendants around the country sued by Northern Leasing and its affiliated companies in Manhattan civil court. According to records the I-Team obtained, the firm has filed 2,300 civil court cases this year alone. Many of the merchants are out of state and say they don’t have the time or money to get to New York City to fight the suits; they end up settling the claims.
New York attorney Krishnan Chittur is attempting to turn the legal tables on the company, suing Northern Leasing in Federal court for racketeering. Chittur has hundreds of clients from around the country and says most of the complaints are about fraud and forgeries.
“We’ve come across too many of [these cases] for this to be coincidental, Chittur said.
Northern Leasing is fighting the racketeering allegations in court.
Michele Leite, the former owner of a now-closed Bridgeport, Connecticut gallery, says she learned about Northern Leasing only after the company started debiting money from her bank account and damaged her credit.
“I think they are bullies," the Millford resident said. "They are abusive, and they are attacking innocent people.”
She had leased equipment from a totally different firm, but Northern Leasing sued her for $1,700, claiming she reneged on their contract. Leite denies ever signing a contract with the firm.
“I didn’t sign this piece of paper,” she said.
After eight years of turmoil, Leite says she is ready to stand up in court for herself as well as other merchants who may have been targeted by Northern Leasing. She is gearing up for a trial which is scheduled to start in late October.
“It’s a principle issue. I feel so many people are going through this, and it has to be stopped,” she said.
Northern Leasing declined to comment on Leite’s case. A spokesman said the firm prides itself on the fairness of its business practices.
