If you sell equipment and handle the lease paper for your customers, as many Green Sheet readers do, you will want to pay close attention to this article. It details the saga of one ISO who was sued and had his assets frozen. Why? Because he completed the lease paperwork fully and completely. If you sign a "witness" line on your leases, think twice before you do so, because that signature could make you responsible for the lease.
ISO Joe Bucco arranged to lease some POS equipment to a merchant through Leasecomm and everything seemed to be going fine until the merchant eventually went out of business.
The merchant, who no longer wanted the equipment, sued Joe, citing that since Joe signed the "witness" line of the Leasecomm lease, he was liable for the lease. Meanwhile, Joe had no idea he was being sued. In December he learned that a judgement was entered against him and his personal assets had been frozen. All the while, Joe never received the judgement. In fact, he never received notice of the suit!
When we talked to Leasecomm, they were as baffled by this case as you may be. They believe that a mistake was made by the court and that Joe did not even need to sign the witness signature, which has caused this judgement to be entered against him for being no more than a witness.
The court told Joe that if he wished to fight, he had to go through the legal system. Beside the extra cost, Joe's assets are already frozen, he still owes $300, and he is also being charged bank fees and court fees. In Joe's words, "You can make up whatever rules you want to me. But, everyone has to follow them and you can't change the rules in the middle of the game."
We agree.
