"I didn't sign that," said Gabe Rosenstraus, a small business owner in New Jersey. "Those three pages are forged."
Rosenstraus claims he never saw all of the pages of the contract he supposedly initialed at the time he signed up for a check scanning machine to put in his Old Bridge, New Jersey, convenience store, called Madison Variety.
Eyewitness News Invstigative Reporter Sarah Wallace: "You did not know you were signing a lease?"
Rosenstraus: "No."
Wallace: "How do you feel?"
Rosenstraus: "That I was deceived. I was scammed."
He claims the sales rep never told him he was agreeing to an ironclad non-cancelable lease with a company called MBF Leasing, and that he'd have to pay for 48 months even if the equipment didn't work. That, apparently, was the case.
As a test, store manager Kathy Sanzone says she put through checks from a closed account and even counterfeit checks.
Kathy: "It's approved, gave us a confirmation number, everything."
Wallace: "What did that tell you about the system?"
Kathy: "That it didn't work at all."
Rosenstraus said the sales representative had promised the deal could be canceled at any time.
"He disappeared," he said. "After I told him the machine didn't work, he was gone like a ghost."
What came next, he says, were calls from MBF Leasing.
"They said I can cancel the service, but they said you can't cancel the lease," he said. "I had no idea. What do I need a lease for?"
While Gabe claims he was tricked into signing up for a check scanning terminal, other small business owners claim they were conned into a contract for credit card processing systems through MBF Leasing and its sister corporation, Northern Leasing. The alleged MO was virtually the same.
"We never saw those page," business owner Gail Winterstella said.
Eyewitness News called the sales representative, who maintained he disclosed everything about the lease to Gabe. But he added, in this case, he would make sure MBF Leasing did cancel the contract. Other small business people aren't so lucky.
"We get files in bulk from [MBF Leasing and Northern Leasing," said Mike Boyle, from the Manhattan County Clerk's office. "There are stacks of cases."
Eyewitness News found thousands of cases filed in Manhattan County Clerk's office by the two leasing companies against mom-and-pop stores accused of reneging on equipment leases. Often, small business owners are out of town and can't get to New York to fight this case, or they just pay the few thousand dollars to make the lease problem go away. That generates millions for the corporations they say tricked them.
"I don't know how they're getting away with this," Sanzone said. "How can you not stop these people?"
A spokesman for MBF Leasing told Eyewitness News, "We are looking into the matter and will correct any problem that we can."
A number of small business people are now pursuing a class action lawsuit against MBF Leasing. One is already pending against Northern Leasing.
NEW YORK AND TRI-STATE AREA NEWS
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