Opened a merchant account with Leaders for our small business. As part of the Leaders account, Leaders acted as an agent for MBF Leasing and leased us the terminal equipment. As our business grew, our charge card transactions also grew. Suddenly Leaders could not process our transactions because the transactions went over $500.00 each.
After some discussion with Leaders, Leaders agreed to terminate our contract, which they did do, and also stated that the terminal equipment could be returned if necessary. As Leaders was acting as an Agent for MBF Leasing, the termination of the contract with Leaders also terminated our lease for the equipment - as described within Texas Law.
We found another merchant account and were told that the equipment we had was not compatible with their system. We purchased a new terminal at that time. We asked Leaders who to send the old equipment to, and they said MBF. We did send all terminal equipment back to MBF.
MBF Leasing claims that the contract can not be terminated and that we still owe in excess of $1000.00 and must either pay the lease in full or continue to monthly payments. The account was closed from which MBF was drawing the funds monthly. Next thing I knew was that MBF was drawing funds from another account that I had. This was done without my permission, and IS ILLEGAL in any state. Now we are getting the pesky phone calls at least 8 times a day (which is also Illegal), and the threatening letters.
The facts are that Leaders did act as an agent for MBF. And as such, any commitment made by them and terminated by them, was made and terminated for all parties involved. Secondly, MBF DID violate the law by somehow obtaining information about my other banking account and taking funds from that second account without my expressed permission. Additionally, MBF did receive the equipment back at the direction of their agent, Leaders.
As with most folks, taking this to court will cost more that the equipment lease. So we are all railroaded into a situation that is apparently not governed very closely and has run amuck. The only solution is class action as I look into my response.