Northern Leasing, also known as MBF, operates a micro-ticket leasing business, leasing credit card point-of-sale (POS) equipment to small business owners. It is a company based in New York City and claims to have provided more than 500,000 equipment leases since 1991.
Micro-ticket leasing is a financing option whereby the leasing company takes responsibility for collecting the debt from the buyer for the life of the lease. The vendor is able to collect funds from its sale prior to paying its supplier so that the vendor does not need to be concerned about payments.
In recent years, there has been a spate of complaints directed at Northern Leasing by small business owners claiming that Northern Leasing provided a credit card or check terminal with a market value of about $300 for lease for thousands of dollars. They also alleged that the company overcharged them for transactions and for fees not disclosed in the lease agreement.
A class action was filed in New York entitled Pludeman v. Northern Leasing Systems, Inc., on behalf of small business owners who had leased credit card POS equipment from Northern Leasing. The suit claimed that Northern Leasing breached the lease agreement by charging and collecting a loss damage waiver (LDW) that was not disclosed on the first page of the lease.
In April 2007, Missouri Attorney General Jay Nixon filed an action against Northern Leasing on behalf of dozens of Missouri businesses that had leased credit card terminals from the company. He charged that Northern Leasing had altered leasing agreements from four-month to four-year terms that would cost an individual business up to $4,000 for the machine valued at about $300. In addition, the businesses were led to believe that the $59.99 monthly charge would offer a wide array of services, but later discovered that it only covered the fee for the credit card terminal. The leases also did not allow for cancellation of the service at any time.