MBF Leasing Bogus contract; mocking calls New York New York

In 2004 my business partner and I started a seasonal company in Seward, Alaska. We are a hiking company that relies on the ability to be able to process credit cards for a majority of our transactions, but since we were a new business at the time, our banking institution, Wells Fargo, rejected our application for card processing. Upon denial, a representative from Wells Fargo referred us to Card Service International (CSI), a credit card processing company. We applied to Card Service International and were accepted quickly.

At first, this came as a relief to us because we were about to start our first season and we needed to be able to process card transactions. In addition, the rates looked reasonable and we were told by CSI that we could cancel our contract within a month for no charge if we were not happy with the service and for a small termination fee after that period. We signed up for their service and were told to call their equipment-leasing department to acquire a terminal.

Without realizing it, we were actually dealing with MBF Leasing -- a different company altogether at this point, not with CSI's leasing dept. like we were led to believe. We talked with Chris Hernandez at MBF and he said that we had two options: we could buy the equipment outright for about 1400 dollars, or we could lease the same equipment for 40 dollars a month over four years for a total of roughly 2000 dollars. We asked Mr. Hernandez why the equipment was so expensive (the same machine goes for about 40 dollars used on eBay) and he told us that we were actually paying for the software to run the equipment, not the machine itself. We know now that this is untrue; the company that makes the machine will program the equipment to work with any processor for free. Being a new, small business, our funds were extremely limited and we chose the lease option, assuming that we were still dealing with CSI. We were under the impression that we were still bound by the same cancellation terms as before.

MBF faxed another contract to us and we did not read it perfectly, but accurate reading was impossible because the type was incredibly small and crooked on the page. We signed it assuming that it was just an agreement to pay CSI more money to lease the terminal, not knowing that we were actually being locked into a contract that is abhorrently over priced, unconscionable, and completely impossible to get out of.

After we signed the contract, we completely lost contact with Mr. Hernandez. He was always out of the office or unavailable, but he was supposed to be our customer service representative. Up to the point when we signed the contract, he had always taken our calls immediately. When we did get to talk to him several weeks later, he was extremely brief with us, didn't answer our questions, and essentially forced us out of the conversation. After this conversation, further inquiries were directed to CSI because we found a customer service card with their number included with the machine that MBF Leasing had sent to us. They were able to solve our problems immediately and the rest of the year proceeded without issue.

When our second season began, we noticed that our processing rates had almost tripled from our first year. When we contacted CSI, they said that this was because VISA and MASTERCARD had changed what they considered to be a qualified card for transactions and that we had to be charged more for most card transactions as a result. Rates were as high as 6%, just to process the transaction. This seemed unreasonable, and so we re-applied at Wells Fargo, got accepted, and cancelled with CSI. They charged us a nominal fee, we willingly obliged and asked if we needed to send the machine back; they said no, and we believed our obligations were at an end.

Then the calls started to cascade into our office. Three to twelve times a day, MBF called and told us to pay them their money. When we told them that we had cancelled their service, we were told that they were a different company and that their contract was non-negotiable and couldn't be cancelled. We said that we would not pay, because they were no longer providing us with a service, and never really had in the first place CSI had given us all of our customer support. We sent the machine back and they kept calling us at our business. When we told them that it was illegal to call that many times for collections, they mocked us and sarcastically asked us if we had become lawyers. The calls continued throughout our season at all hours. The callers routinely mocked us, called us names, shouted, Pay us the money! into the phone and told us that there was no way to get out of paying them the 1400 dollars that we still owed them. When we would ask to speak to managers the callers would laugh and hang up on us, then call back an hour later.

We have done research on this company in recent months and have found that there are many consumers with the same complaints. Some people claim that the company went so far as to forge signatures on binding contracts and then sue when payment is not provided. We also now have reason to believe that CSI and MBF are owned by the same parent company and that the whole process was intentionally misleading. Suffice it to say, we feel like we were targeted as a young company and expertly scammed.

Why would two business owners pay 2000 dollars for a 40 dollar machine unless something was misrepresented in the application process? How can a company charge so much to simply redistribute a product, without providing any discernable extra service?

MBF seems to target young companies outside of New York. They require that lawsuits be settled in NY; most people will not or can not fly to NY to fight them and they make a lot of money off of these small lawsuits because people default. We do not want to default because we have obvious ethical complaints, but also because MBF has severely negatively impacted our credit rating, destroying our chances of getting the loans necessary for the further growth of our business.

This type of unethical business should not be tolerated. MBF targets, young and nave businesses and preys on them. We are believe that we are honest and hard working people, and MBF has chosen to profit from us by deceiving us and fraudulently representing their services. As a result, they have severely truncated the growth rate of our business by destroying our credit. We believe that this is wrong, and possibly punishable behavior.

Brendan
Seward, Alaska
U.S.A.