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Citicorp Vendor Finance

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Richard of Vienna VA writes (8/19/02): I signed a lease through my company to lease a printer for 36 months. The payments were $125.38 per month. July was my last payment. The price of the printer was $4000. When I called Citicorp to find the buyout price, they sent me a price of $2714.54. Most leases charge 10% of the purchase price or $1. They said because I did not cancel the lease between 90 and 180 days before the end of the lease, they automatically renewed it for another year.

This is written in the lease, but I did not read this part or had forgotten about it. They, of course, sent no memo or anything asking if I intended to renew, hoping I would forget to cancel the renewal. The buyout price includes one year's worth of lease payments at $125.38 per month pluse sales tax. I no longer have the machine; it was trashed months ago. Why do I have to pay sales tax, personal property tax and payments on something I do not have? Can I be automatically renewed like that? Wouldn't I have to sign something? The buyout price of $1209 (this does not include the renewal) is outrageous. The value of the printer couldn't be more than $400. This is a scam. I want to fight it.

These parasites are feeding off small businesses that require difficult to find financing. This is emotionally damaging as I struggle every day just to pay my bills and payroll. Now I have to stand up for my rights and those of others who are victems of these predators. It takes all my energy to keep the doors open on this small business. Deferring energy to fight this is going to cost me in time and money. I do not intend to pay them any more money, so they will begin calling and harrassing me on the phone.

Every small business owner needs to read, read and re-read every equipment lease before they sign it. Then they need to sleep on it for a month or so. We have all been taken to the cleaners by terms such as Richard describes. Unfortunately, leases are usually very tightly written and we fear Richard will spend a lot of time and money fighting the charges, with only a slight chance of prevailing in court.

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