Potential Scams and Pitfalls

The commercial equipment leasing industry is over a two-hundred billion dollar industry. As with any industry there are occasionally companies who do not operate at the high ethical standards of the majority of the companies in the leasing industry. At Liberty Leasing Services, Inc. we believe it is our obligation to make you aware of potential scams and pitfalls.

If you have any comments or questions, please feel free to contact us .

Spam Companies

Anyone with an email account has probably received solicitations offered via spam email.  When receiving messages such as "Your company has been pre-selected to receive a $200,000 leasing credit line! Simply call us to accept today!”, realize that there is the potential that is a scam. In many cases, this is quite simply a request for you to fill out a credit application so the company can retrieve your credit information to determine if you would be eligible for credit.  Organizations like this are masters of “fine print” and often times do not provide the services originally offered in their email. In addition, please be aware that the number of times a credit bureau report is pulled can have a negative effect on your ability to obtain credit.

Interest Rate Scams

Although many companies may advertise guaranteed low rates we advise you to proceed with caution. Many factors go into the calculation of a lease payment including the applicants credit history, the equipment being leased, the lessors cost of funds, the amount being financed, etc. Often times these low rates are used as teasers to get you complete their application and frequently the final terms are not what was originally guaranteed.

Ownership Scams

If you intend to own the equipment at the conclusion of you lease term make sure the lease contract specifically states that the end of lease term option is for a "$1 Out".  There have been instances within the equipment leasing industry where the lessee was told they would own the equipment at the end of the lease term when in fact the lease documentation stated something entirely different. In these instances the lessee was contractually bound to pay an additional percentage of the original purchase price in order to obtain title to the equipment.  We urge you to read your lease document twice before signing.

Security Deposits or Advance Payments

Frequently, equipment leases require the applicant to make advance payments or security deposits at the inception of the lease term.  Generally, advance payments are applied to the first and last months rents thereby reducing the number of payments you will make over the contract term (i.e.: original term of 60 months less first and last advance payments equals 58 additional payments).  Security deposit payments will be held (without interest) for the term of the lease contract and may be returned or applied to your obligation at the end of the lease term depending on the language in your lease agreement.  Make sure you understand what type of payment you are making at the inception of the lease.

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