WALTHAM - Mike Brennan of Washington state is one of hundreds of small claims defendants this year facing suits brought against them in Waltham District Court by Leasecomm, a Waltham-based company.
Brennan, like other defendants who tried to cancel contracts with Leasecomm, decided it was not worth paying the price to travel from Washington to defend himself in Waltham against a small-claims suit.
Leasecomm, at 950 Winter St., leases credit card processing and software equipment to small business owners. Business owners are provided with the equipment by various vendors while Leasecomm handles the billing.
Brennan runs Mike's Meats, a company that sells jerky - beef, turkey, salmon, you name it. He makes the rounds at trade shows, and Leasecomm's equipment seemed to make accepting credit cards more convenient.
He signed a contract for $49.95 a month for six months. Most of the time the equipment didn't work, he said.
"When you put the bank card in, the screen would flash and say 'Out of range,' " he said.
Brennan had the equipment examined and was told it was no good, so he returned it. Leasecomm, however, refused to cancel his contract and kept billing him. When he refused to pay, the company filed a $1,900 suit against him, he said.
Yesterday afternoon, Brennan was scheduled to attend a hearing in Waltham, but, "it's not cost effective to fly there and fight the suit," he said.
Two lawyers representing Leasecomm showed up to deal with 20 similar small claims. They were the only plaintiffs who had small claims cases on the court schedule, and none of the defendants, all of whom were from out of state, showed up.
Investigation
A report by the Securities and Exchange Commission, the federal financial watchdog, says that "Leasecomm has been served with civil investigative demands by the offices of the Attorney General for the states of Kansas, Illinois, Florida, Texas, and for the Commonwealth of Massachusetts."
The Massachusetts attorney general's office, as a routine matter, does not say what businesses it is investigating.
However, Richard Latour, president and chief executive of Microfinancial Inc., of which Leasecomm is a subsidiary, said there is such an investigation.
"It's an investigation that has been going on for some time," he said.
Latour declined further comment except to say that Leasecomm's quarterly filing with the SEC will be submitted tomorrow.
Spokeswoman Sarah Nathan did say that Attorney General Thomas Reilly's office has received 698 complaints involving Leasecomm since 1999. The company has been in business since 1985.
Also, Leasecomm has received the second largest number of complaints to the Better Business Bureau of any businesses in eastern Massachusetts, Maine and Vermont in the past 12 months, said BBB spokeswoman Maria Sabale of the regional office in Natick.
Mad customer starts Web site
Lauren Stephens of Nevada also didn't think it was worth spending the money to come to Waltham District Court when Leasecomm filed suit against her in 2000.
Stephens rented equipment for use with an Internet and phone-order furniture company she ran at the time. For her, the equipment worked fine. But, every month Leasecomm kept raising her payment rate, she said.
Stephens signed a contract to pay $27 for 48 months and was not willing to pay more. So, she tried to cancel her contract and was sued, she said.
To fight Leasecomm, Stephens created Leaseconn.com at www.laurenstephens.com/leasecomm/freestuff.html. The informational site is designed to help and network for Leasecomm victims, she said.
"They even went and attached a bank account of someone else in Las Vegas with my name for $1,900," Stephens said. "I got a letter from the sheriff's department in Clark County saying they had a lien against me, and attached a bank account at Wells Fargo Bank. I told them, 'That's not my account.' "
Stephens receives new e-mails every day from other people who say they have not been treated fairly by Leasecomm, she said.
Leasecomm Chairman and Chief Executive Officer Peter Bleyleben could not be reached for comment on Stephens's Web site or to answer other questions about the company.
Courting business
Leasecomm suits against customers with whom it has contract disputes make up nearly one-third of the small claims cases filed at Waltham District Court.
This year, the company has filed 800 suits out of a total of 2,800, according to Waltham District Court Clerk Michael Finucane.
But 800 suits is actually a decline for the Winter Street firm. Last year, Leasecomm filed 5,000 of 7,000 small claims. The company filed the same number of small claims cases the year before that, Finucane said.
Leasecomm's propensity for dominating Waltham's small claims court is bogging down court employees, he said.
"It absolutely does," he said. "But, of course, we can't refuse cases."
And Leasecomm always wins because the defendants never show up, Finucane said.
"Almost all of them are default judgments because all of their clients are out of state," he said.
Yesterday, 11 of the 20 cases ended with default judgments in favor of Leasecomm. The others were continued.
Thomas Palmer, one of the lawyers representing Leasecomm yesterday, declined to comment.
