Northern Leasing Credit Card Equipment Fees Class Action Settlement

Individuals and businesses who paid taxes or fees on leased credit card equipment from Northern Leasing may be able to benefit from a recent class action settlement.

Plaintiff Rainbow Business Solutions filed this class action lawsuit in 2010, along with nine other individual and business plaintiffs. These plaintiffs claim that defendants Northern Leasing Systems Inc. and seven others conspired to fraudulently charge fees and property taxes in the connection with the leasing of credit card terminal equipment and processing services.

According to the plaintiffs, Northern Leasing and the other defendants assisted certain independent sales organizations, or ISOs, to induce retailers to enter into equipment leases using tactics that the plaintiffs say are unconscionable.

These ISOs allegedly used a lease that appeared to be one page long while concealing two additional pages that the merchant would not see before entering into the lease. The defendants allegedly allowed the ISOs to set exorbitant monthly lease fees and rewarded them with commissions based on those high fees.

ISOs also charged merchants “administrative fees” that were supposedly related to personal property taxes for leased equipment, even though the leases did not provide for such fees, according to the plaintiffs. The ISOs allegedly engaged in abusive tactics in an attempt to collect money owed under these leases.

The plaintiffs also claim that from 2006 to 2010, the defendants miscalculated the property taxes they collected on leased equipment using an inflated cost basis. They allegedly calculated taxes based on an “acquisition cost” that included the commissions paid to ISOs, rather than the actual “equipment cost.”

And in 2011, the plaintiffs claim, defendants allegedly fraudulently collected certain taxes from lessees after their leases expired, even though such taxes were not actually due.

The parties’ attempts at negotiation and mediation spanned several years. They finally reached the current settlement agreement, which the court preliminarily approved in August 2017.

Under terms of the settlement, Northern Leasing and the other defendants will make payments to individuals and businesses who paid the taxes and fees at issue. The total amount required to create the settlement fund will be determined by the settlement administrator. Settlement payments should be worth $14.25 and up.

The defendants also agree to continue using the market value of equipment as the basis for calculating taxes for at least two years after the effective date of the agreement.

Class Members can exclude themselves from the settlement or object to its terms by filing a written request no later than Oct. 31, 2017.

Who’s Eligible

There are two different settlement Classes:

• The Property Tax Equipment Cost Basis Class consists of all persons and businesses who since March 26, 2006 paid property taxes to any of the Leasing Defendants based on a cost greater than the equipment cost. The Leasing Defendants are Northern Leasing Systems Inc., MBF Leasing LLC, Northern Funding LLC, Jay Cohen, Leonard Mezei, Sara Krieger, Sam Buono, and SKS Associates LLC.
• The SKS Post-Lease Expiration Class consists of all persons and businesses whose lease number appears in a record called “Schedule 1,” which is available on the settlement administrator’s website here.

Potential Award

Varies.

Members of the SKS Post-Lease Expiration Class from whom monies were actually collected will receive a payment worth the full amount collected. Those Class Members from whom monies were not collected will receive $15.

Members of the Property Tax Equipment Cost Basis Class will receive $14.25 for each year after March 26, 2006 that they paid property taxes to any leasing defendant based on a cost greater than the equipment cost.

Proof of Purchase

No proof of purchase is necessary beyond the information requested on the Claim Form.

Claim Form

CLICK HERE TO FILE A CLAIM »

Claim Form Deadline

12/28/2017

Case Name

Rainbow Business Solutions Inc., et al. v. Merchant Services Inc., et al., Case No. 10-CV-01993 CW, in the U.S. District Court for the Northern District of California

Final Hearing

11/28/2017

Settlement Website

www.NorthernLeasingSettlement.com

Claims Administrator

Northern Leasing Settlement
c/o A.B. Data, Ltd.
P.O. Box 173043
Milwaukee, WI 53217
877-221-7632
info@NorthernLeasingSettlement.com

Class Counsel

Adam Gutride
Seth A. Safier
Kristen Simplicio
GUTRIDE SAFIER LLP

Defense Counsel

Arnold N. Bressler
Scott E. Silberfein
MOSES & SINGER LLP