Mike Brennan fits the typical profile of a Leasecomm target, Low income, struggling
day to day, minding his own affairs, seeking to improve his station in life through honest, hard work and trusting others to do the same. Just a real Nice Guy but,
DON'T TRY TO BULLY HIM BECAUSE HE FIGHTS BACK!

Local man to get his day in court against alleged scammers

Before reading these articles you should familiarize yourself with; The Big Lie  and  Criminal Methods in order to fully appreciate the fact  that this story is "business as usual" for Microfinancial, straight from their "play-book" and not an aberrant case. The FTC press release drives home my point. So does their Prospectus Doug Ramsay Photo

Mike Brennan, right, won a battle with a cardreader scammer last week. Rick Pratt, left, got scammed by a different branch of the same company. Brennan will get a full trial instead of the summary judgment Leasecomm requested.

March 2, 2005                                (next hearing scheduled for Sept.)

The Snohomish County Tribune

Washington State

 By Jessica Sparks

Small business owner and local senior Mike Brennan of Mike’s Meats in Monroe isn’t afraid of Leasecomm Corp. and its quest to sue anyone who entered into a contract with the company

“ They will regret the day they met this old country man,”  Brennan said after his victorious court hearing, which gave him the right to a jury trial in Leasecomm’s suit against him.

Leasecomm is suing Brennan for nearly $3,000 plus attorney fees for breaking the terms of his four year, non-cancelable lease agreement to lease a credit card processing machine, which Brennan said only worked 50 percent of the time.

Leasecomm filed a motion for summary judgment, which was denied by an Evergreen District Court judge on Feb. 22. A summary judgment would have given Leasecomm a victory without a trial. Now Brennan’s trial date is set for May 25.

Brennan said his next step is to find an attorney who will file a class action lawsuit against Leasecomm. Brennan said his friend Rick Pratt of Monroe’s Snohomish Transmission was also ripped off for $3000 by another of Microfinancial’s companies. Microfinancial is the parent company of Leasecomm.

Pratt has located at least 12 others in Washington who were ripped off by the company.

Brennan plans to counter sue for $5000. He said he should be compensated for the $1,250 he paid on the lease, another $1,250 in attorney fees and $2,500 for lost time and business.

Leasecomm’s attorney Robert Scanlon of Spokane’s Dellwo, Roberts and Scanlon, tried to argue the facts are simple – Brennan entered into a four year lease agreement at $49.95 per month in 2000 and stopped making payments in 2002 – and those facts warrant a summary judgment in favor of Leasecomm.

“Judge, don’t be fooled,” Brennan said during the hearing. “There are issues of fact to be looked at. My best witness is the attorney general of Massachusetts.”

Brennan, who represented himself at the Feb. 22 hearing, argued that Leasecomm broke the lease from the beginning, because the company used deceptive business practices to lure people into the leases.

In 2003, Leasecomm agreed to relieve $24 million in debt for more than 6,000 small business owners, including Brennan, in order to settle allegations of the company’s deceptive business practices.

Under the settlement agreement Leasecomm was fined $1 million and given the opportunity to either dismiss or refile the suits against people in their home states.

Leasecomm, based in Boston, sued a bunch of people like Brennan who couldn’t afford the trip to appear in court in Massachusetts and subsequently lost by default.

The settlement stemmed from a joint investigation conducted by eight states attorney general’s offices and the Federal Trade Commission. In Massachusetts, more than 700 complaints were filed against Leasecomm between 1998 and 2003.

“Leasecomm used sellers of highly suspect business opportunities to sell their financing, and then claimed it had no responsibility for their deception,” according to a statement from the office of the Massachusetts Attorney General. “Companies that try to hide behind the fine print in contracts and lie to consumers about what they’re signing, whether directly or through agents, simply don’t pass muster.”

Allan Cail, formerly of Cardservice International, a so-called independent sales company, sold the machine to Brennan in 2000.

Cail said he will testify Cardservice had a relationship with Leasecomm. He said salesmen got a finders fee for every contract they got for Leasecomm.

Cail said Brennan was the last person he sold a machine to for Cardservice.

Cail said Cardservice pushed its young salesmen to sell lease agreements at $35 to $95 per month for four years. The typical agreement was for four years at $75 a month. The salesmen were to never mention the option to purchase the machine for $300 to $400.

In addition to that, he said, they oversold the product claiming the machine got reception “where ever you see a UPS truck.” In reality, at the time Brennan bought the machine, more pockets didn’t get reception than did.

Brennan submitted several news articles and documents showing previous rulings against Leasecomm to Judge Patricia Lyon.

Scanlon said he was being “blindsided” by this information, because that information should have been provided to him prior to the hearing. That he says leaves the court no choice but to rule for a summary judgment.

Lyon said in fairness she couldn’t expect someone who is representing himself to have known about the disclosure rule.

“I can’t believe the plaintiff would be surprised,” Lyon said. “I’m not inclined to grant summary judgment because he didn’t meet a rule of summary judgment response.”

Then Scanlon attempted to scare Brennan by reminding him if they go to trial he’ll be flying witnesses out from Massachusetts, if Brennan loses, he will be responsible to pay back.

**********************************
Monroe Monitor and Valley News

BY POLLY KEARY STAFF WRITER
   Mike Brennan showed up at Evergreen District Court in Monroe Tuesday ready for a fight, although the odds were stacked perilously against him. His opponent was an experi­enced attorney representing a multi­million dollar company that does business nationwide.

   Brennan, clad in his ubiquitous overalls, is dyslexic and was represent­ing himself. In spite of the fact that he entered into a terrible contract with his oppo­nent's client, Leasecomm, for equip­ment that didn't work and was only worth a fraction of the value of the four-year lease, it seemed likely that the judge would order him to pay.

He did, after all, sign the lease for the equipment, a credit card reader that would allow him to accept Visa and Mastercard for the beef jerky he sells at flea markets and trade shows. It doesn't matter that the company offers exorbitant leases to naive small ­business owners for shoddy equip­ment all over the country, then sues for the entire value of the long leases when the owners discover the deception and try to get out of the contract. A tiny line in the fine print says that the lease can't be cancelled, and that there is no warranty and once signed, any lease, no matter how ridiculous, is binding.

   So, after a four-year battle with Brennan, in which Brennan refused to pay, refused to travel to Leasecomm's home state of Massachusetts to go to court there, and told several collec­tions agencies to jump in the lake, Leasecomm is suing the retired entrepreneur in Monroe. Tuesday, Robert Scanlon, Leasecomm's attorney, sought a summary judgment from Judge Patricia Lyons, claiming that because the non-cancelable lease was signed, the case was so open and shut that no further time should be spent on it. Rather, Brennan should just pay up.

   Lyons had several good reasons to comply with the request. Signatures are, after all, pretty much the last word. And Brennan, not an attorney, had not known to comply with Rule 56, which says that if one plans to dispute a case, one must declare one's intentions in written form ahead of time. He hadn't. Also, the longer the case drags out, the more it is likely to cost Brennan an ever larger sum, as Scanlon made perfectly clear in the court room. A representative from Leasecomm would have to come to Washington for the case, should it go to trial, Scanlon said. "If we try this case arid [the representative] comes out here from Massachusetts and we win – and we will - Mr. Brennan will be tagged with travel expenses," Scanlon argued. Scanlon himself practices in Spokane, and he's keeping his gas receipts.

But Brennan's not done fighting.

    "If I don't get a chance to air this out in court because of a summary judgment, it will be truly unjust," he said.

   Lyons agreed, sometimes struggling not to smile at Brennan's legal naivete, such as when he yelled "objection" before his opponent had finished a sentence or when he gave the judge a dossier of documents, unaware that certified copies were also supposed to be given to the other attorney.

   "Fairness seems to require that he be given an opportunity to challenge the suit against him," she said, and set a trial date of May 25.

  Fairness may cost Brennan a pretty penny. It has already cost him four years of headaches, starting when the man signed a lease that even the sales­man who explained it to him, then sold it to him, now says was unfair.

  The salesman, Alan Cail of Gig Harbor, says that he bought a franchise opportunity with Leasecomm for $5000, planning to sell and lease office equipment as a way to make an independent living.

  The wireless credit card reader, made by a separate company called Cardservice International, was a particularly good product, it seemed. Leasecomm, which acted as the financing agency and thus did not offer a warranty, said that it used the same communications system as UPS trucks do, and therefore would work anywhere UPS did business. At first, Cail was eager to offer the product to clients. Then, the truth came out.

   "This machine didn't work," he said. "It didn't work on the 1-5 corri­dor, it didn't work in Portland, it didn't work in Monroe."

  Furthermore he was encouraged to conceal the real value of the machine, about $300, in order to lease it for $95 a month for four years at a time, for a total of more than $4,500.

  "John Q. Public doesn't know how valuable these things are," Cail said.

  Disgusted, Cail walked away from his investment and now works for a more reputable firm that sells similar technology at a fair price. He says there may be as many as 700.people in the Puget Sound area who signed such leases, perhaps a dozen or more from the Sky Valley area. But by this time, Brennan had already signed his lease, and already regretted it. Once, he realized it didn't work, he tried to send it back and get out of his agreement, only to be sued from the state of Massachusetts for the balance of the lease.

  He struggled and dragged his feet, even contacting the judge by phone to get his case continued.

  Then, the Federal Trade Commission (FTC) and eight attorneys general from around the country won a court case demanding that Leasecomm stop initiating lawsuits from Massachusetts. If the company wanted to sue little businesses for breach of lease, it would have to do so in the home counties of each.

  Leasecomm, though, bloodied by a $24 million loss in a separate class action suit and hounded by the FTC, started hiring attorneys and going after small businesses in their home counties, confident that the power of a signature will prevail.                    

  According to Jack Zurlini, an assis­tant Washington State Attorney General who is familiar with the case, they have reason for confidence "If people could get out of a written contract, it would throw the entire financial world into chaos," he said.

  There is a glimmer of hope, but only because of Brennan's disability. If the salesman misled him in the verbal explanation, that would be "significant," according to Zurlini, who will not comment on whether the Attorney General is investigating the case, although he expressed an interest in talking to Cail.

  Meanwhile, Brennan is looking for an attorney interested in a class action suit and says he has gotten some interest. Win or lose, come May 25, he's ready for a fight.

"We're dealing with low-life sewer rats," he said.

***********************************************
More from Polly Keary

Headline: A lease for loss

Signing a lease for faulty equipment costs Monroe businessman four years of 

legal struggle

Cutline: Mike Brennan, left, signed a lease for a credit card reader that he 

says never worked. When he tried to cancel the lease, the company sued 

him, a pattern the company has repeated throughout the United States. Rick 

Pratt, left, owner of Snohomish Transmission, said the same thing happened to 

him two years ago.

By Polly Keary, staff writer

Mike Brennan is severely dyslexic, so when the Leasecomm salesman 
explained the lease he was signing for a credit card reading 
machine that would allow him to accept plastic for the home-made 
jerked meats he sells at trades shows and fairs, he had to trust 
the young man.

 Five years and hundreds of dollars in legal fees and 
other expenses later, he is being sued by Leasecomm for more than 
$3000 for equipment that Brennan says never worked, as well as legal fees.


Brennan is not alone; Microfinancial, the company that owns 
Leasecomm, last year agreed to cancel $24 million worth of 
similar claims against small businesses all over the United 
States in exchange for an end to an FTC investigation of its 
business practices. Regulators said that Leasecomm tricked 
companies like Brennan’s into signing misleading contracts in 
order to impose fees on them, then sued for the fees from 
Massachusetts, winning default judgments against business owners 
who could not make the trip there to appear in court.
Brennan was one of those business owners, but his fight was not 
over. All he won was the right to have his case heard in 
Washington State. Brennan doubted that it would be worth the 
money for the company to come to Monroe to sue him. He was wrong.

Non-cancelable lease
It started at the Evergreen Fairgrounds, at a gun show where 
business was usually good for Brennan. A man approached and 
asked if he accepted 

Visa or MasterCard. Brennan explained that 
he only took cash or check, as he didn’t have the technology to 
read cards.The man launched into a sales pitch, explaining that 
his company could lease him a wireless card reader that could be 
used anywhere. Brennan, a careful and methodical man, discussed 
the details and finally agreed. Because of his dyslexia, he asked 
the salesman, Allan Cail of Gig Harbor, to go over the contract 
with him. They agreed that the monthly payments of $49.95 would 
be withdrawn from his account at First Heritage Bank. The lease 
was for four years. It seemed like a good deal, and Brennan signed.
"It is a valuable service to merchants, if it works," Brennan said.
"We are a credit card society.
"It didn’t work." At least 50 percent of the time it said 
‘outside of range’ when I tried to use it," Brennan said. 
"One time I was six blocks from a guy’s bank and it didn’t work."
The hassle of trying to operate the unreliable machine was more 
embarrassing than not having a credit card reader at all, he said. 
He put the machine back in the box and returned it to the 
company, then got his bank to stop making payments.
The next thing he knew, he was getting sued. The lease, it 
turned out, was non-cancelable, as most leases are.
"The general public is unsophisticated and unsuspecting," he said.
 "You get a lawsuit, you don’t know what it is, you put it in a 
drawer."
Not alone 
Then a friend of Brennan’s told him about a story that appeared 
in the Everett Herald on July 1, 2002. Called "Losing by the 
Numbers," it was the story of Rick Pratt, owner of Snohomish 
Transmission in Monroe. Pratt, too, had come to regret a contract 
with a company owned by Microfinancial, this time called Premier 
Capital. A salesman had attracted Pratt to the contract 
by promising a slightly lower per-transaction fee than other 
companies. 

Most companies charge about two percent of the 
transaction amount; this company offered 1.6 percent."I’d been in 
business nearly 20 years," he said. "I’d seen some scams, but it 
looked OK. They weren’t offering an unbelievable deal, just a 
slightly lower fee." He says he pays nearly $400 a month in such 
fees, so the .4 percent savings would add up after a while, 
which is why he signed the lease.

When no one ever came to install 
the machine, he called the company’s Bellevue office, only to 
find they had closed. When he, like Brennan, returned the 
equipment and announced he didn’t want to pay, he told his bank, 
Wells Fargo, not to transfer any more funds. The company, though, 
convinced the bank that the lease was binding and had $2,644.48, 
the entire balance of the lease, deducted from Pratt’s bank 
account. Pratt acknowledges that he authorized transfers for 
the monthly payments, but not any other sum. "That’s just like 
somebody writing a check for one amount and you scratch it 
out and write in a bigger amount," he said.

The bank, however, said it was not able to do otherwise once the 
lease and Pratt’s signature were shown to be valid.
When Brennan saw the story, he immediately closed his checking 
account and contacted Pratt, who told him that at least a dozen 
Snohomish County businesses had been hit. Although Pratt had 
already lost his money, he helped Brennan as much as he could.

Long struggle

Brennan initially avoided a default judgement against him in the 
state of Massachusetts by calling up the judge and asking for 
continuances, then getting an attorney to stall the company 
further. Finally, Leasecomm lost a big lawsuit that forced them 
to stop suing some companies from outside their states.


Brennan hoped that would be the last of it. Then a series of 
collections agencies began to dun him for the money, the latest 
less than a month ago."They just don’t give up," Brennan says.

In November also, Brennan was served with a summons to appear in 
Evergreen District Court in Monroe. Leasecomm had hired a Spokane 
firm, Dellwo, Roberts and Scanlon, and were pursuing the suit. 
Robert Scanlon, who is handling the case, referred questions to 
Leasecomm. Leasecomm did not return calls.

Although leases are very hard to break once they have been signed,
Sean Beary of the Consumer Protection Division of the Washington 
Attorney General’s office says Brennan’s case doesn’t seem 
hopeless. "To me, it’s a matter of the equipment didn’t work as 
it was represented," he said. "It seems fundamentally pure and 
simple. "His advice to consumers faced with a salesman offering a 
service or product is to shop around. "If you need some kind of 
product or service, go out, shop around, find out what’s out 
there," he said. "Talk to other people, ask what they use, do 
your homework."
Now, Pratt is helping Brennan prepare for his day in court. 
They are trying to find other victims that could appear in court 
to testify to the questionable business practices of the company.
"I’m just kind of helping Mike out," he said. "It wouldn’t hurt 
to have a half-dozen victims to stand up for him in court. And it 
would be nice if this didn’t happen to anyone else."