A Leasing Nightmare
Leasing can be a very frustrating experience. I once called on a merchant who had 3 different leases and he wasn’t even sure what they were for. Upon examining his business checking account statement I was able to help him identify who the leases were to and what they were attached to.
It turns out he had a lease for his terminal, another separate lease for a pin pad, and a third lease of $89 a month which he’d been paying for 6 years and wasn’t even sure what it was for. This particular lease had expired after 5 years, but he was still unsuccessful getting the leasing company to stop taking money out of his checking account.
How can this be, you ask?
That’s a good question, one you’ll be able to answer by the time you’ve read all of this post.
Your Processor Is Not Your Leasing Company
Many merchants are surprised to learn that the credit card processor and the leasing company which owns the leasing contract a merchant signs are two entirely different business entities.
This means you are free to switch processors at any time (unless your card processor has you locked into one of those manipulative „Early Termination Fee“ contracts I often rail against), and it will have no bearing whatsoever on your credit card terminal. Your new processor will simply download new software into your existing terminal.
Why Leases Are So Hard To Get Out Of
Something merchants don’t stop to consider when signing a merchant agreement (especially for the first time), is the lease they are signing is non-cancellable, with very few exceptions. What this means is you WILL make the payments for the full amount of the term, unless you violate the contract or negotiate your way out of it.
One reason is because the leasing company has already paid an upfront commission, which can be as high as $1,000+, to the salesperson who got you to sign a lease. So they’re definitely going to recoup what they’ve paid. But it goes beyond that.
Another reason it’s so hard is because they have a recording of your voice over the phone agreeing to the contract terms, before you can get the equipment.
I hate leases. Yes, I’d make a great upfront commission. But if I did that I’d also be forcing my merchant to pay as much as 10 x’s the value of the equipment by the time the lease expires. Forget that. I still want to be my clients friend 5 years down the road.
The Eternal Lease
Not only will you pay for the full term you agreed on for your lease, but the majority of leases will never end unless YOU STOP THEM. This is true even after the initial term of the lease has expired.
How can this be?
The contract usually states it will remain if effect for ____ number of years, and continue beyond that until either party stops it. Often, they’ll insert a clause stating it will automatically renew itself in 1 year increments, unless the merchant stops it, in writing, at least 30 days prior to the expiration date. Meaning the contract will perpetually renew itself, until the merchant ends it..
This means that unless you have read your contract and written down when it ends you can end up being „eternally bound“ to it. (What an ugly way to do business).
How To Legally Get Out Of The Lease
To end the lease you will need to know the terms and exactly what’s written in the contract. Here are 4 ways most of the leases I’ve encountered are structured to release you from further obligation – from „good“ to worst.
- A $1.00 buyout. This means when the lease expires you can get out of it by paying $1.00 and you now own the equipment. As far as leases go this is the one that’s the most fair (other than outright owning it, which a few rare contracts allow)
- Fair market value This is saying that at the end of the lease term the leasing company will determine the current market value and require you to pay it to keep the equipment and end the lease.
- Send it back. I find this one particularly disgusting. After paying possibly 10 x’s the value of the machine over a 4 or 5 year period the leasing company demands you return the equipment to them or they’ll continue to debit your checking account – „eternally“.
- Lease buyout This is where they want you to pay for the remaining months of the contract and then the lease is over. I’ve listed this as the worst, but it’s only the worst if you’ve just started the lease, meaning it can potentially cost thousands of dollars, and again – at up to 10 x’s (or more) of the value of the terminal.
With options like those listed above it’s no wonder they make sure to get your voice on record over the phone agreeing to the terms they state before you get the equipment. Unfortunately, they don’t disclose all the facts. If they did you probably wouldn’t go through with it.
Basically, they only get you to verbally commit to a „non-cancellable“ lease, at „x“ amount of dollars, for „x“ number of months.
My suggestion? If I was obligated to an equipment lease I would immediately get out my contract and do the following:
- Understand the terms of ending it… i.e., $1 buyout?, fair market value?, return equipment? etc.
- I would find the exact month the lease was scheduled to expire – and
- I’d get out my calendar and mark it for 60 days before the expiration date, upon which time I’d –
- Send a certified letter stating that I want out of the lease on the expiration date
NOTE: Something most merchants don’t understand is that in the majority of cases the lease WILL NOT END UNLESS YOU TAKE ACTION. That means even if it’s called a „36 month“ or „5 year“ lease the timeline is only to state when you are eligible to end it – not when it will end.
Just writing about how these companies do business is almost enough to make my blood boil. And it should be enough for you to proceed with caution when leasing credit card equipment!
What does credit card identity theft really mean? Starting a day with the fact that you have just been robbed of your personal information is bad enough. The credit card number you saved on your computer becomes your three-year-old agony. You change your mind about the safety of a personal computer. The credit card identity theft is one of the most common online crimes.
The unauthorized use of another individual's personal information in fraudulent acts is considered identity theft. This personal information can be:
• birth date,
• street address,
• email address,
• marital status,
• geographical location,
• driver license number,
• credit card number,
• debit card number,
• Bank account number.
And therefore credit card fraud is the unauthorized use of a credit or debit card, or similar payment tool recurring charge, to fraudulently obtain money or property. Credit and debit card numbers can be stolen from unsecured websites, personal computers and used in credit card identity theft.
Credit Card Identity Theft Facts
Whatever would someone want with stolen information? Believe it or not, there is a substantial and thriving market on the Dark Web selling this kind of data. Depending on how much personal information a thief can collect on one person, it could cost anywhere from $1 to $450 a piece.
These thieves are also referred to as hackers. The hackers are computer enthusiasts, however, the ones with fewer ethics are prone to stealing. Which, in consequence, brings us to the cybercrime groups always on the hunt for information.
Federal Trade Commission (FTC) conducted a research that showed that this stolen information will appear on black markets within minutes. It takes about 9 minutes for the thieves to categorize and put up someone's identity for sale.
The most affected country in the world is Mexico. While 46% of all worldwide credit card identity thefts occur in the USA. According to Javelin Strategy & Research, this form of identity theft happens every two seconds. Seems that the most affected age group is over 50 years of age and young adults from 20 to 29.
The elders are having a problem because of their lack of knowledge. They are the easiest targets.
"It says I opened a new account?" - said the elderly Mrs. Smith shaking her head in shock. "Well, I have never... " - the old lady kept going in disbelief when the bank called her.
That was the beginning of three years of agony for the old lady and $7,761 in expenses she had to borrow to solve the issue. Many of the victims have exactly the same financial losses due to being victims of credit card identity theft.
Mrs. Smith had discovered this shocking fraud within three months. However, Identity Theft Resource Center (ITRC) Aftermath Study shows reports that it takes almost three years for victims to realize their identities are stolen.
Credit Card Identity Theft Protection
An aftermath of credit card identity theft is emotionally, and physically exhausting. The greatest impact has the financial expense. How does someone protect themselves from the credit card frauds and identity theft?
The best practices for the users are:
- Reviewing the bank accounts, and credit statements on regular basis. A truth can be uncovered if the irregularities are noticed early.
- Keeping a social media and other accounts under control. It is a well-known fact that the social media networks are data hungry. Keeping a personal data to a bare minimum is the best practice. Also, ensuring that only friends can see the event posts.
- Running a scan and discovering personal information stored on the computer. The security companies developed a software designed to keep private information private. Such is the Identity Theft Preventer that scans within text files, as well as the Internet Browser to uncover the sensitive information exposed.
Storing the Personal Data on the Computer is a Bad Idea
Keeping the personally identifiable data away from the computer and hard drive can immensely prevent any inconveniences. The market research uncovers that many people save their information on their personal computer. Most of them save the bank account credentials or SSN numbers in text files.
Cisco's research of the Asian market shows that 27% even store their personal data on office computers. Any trace of such data can get a user in much greater trouble. Some of the victims of identity theft have reported that they went through all sorts of inconveniences. Some had been interrogated by the law enforcement due to their personal data being abused by criminals.
The Malware created below the grid and on the Dark Web, can allow its creator to see all the files stored on victim's computer. The majority of online Identity Thefts are performed through the distribution of malicious software. Keeping the personally identifiable data out of the reach can minimize the exposure of personal information.