A customer called Medical Advances sent us 5 applications in rapid succession, for equipment leases in early 2009. Each customer was allegedly looking to purchase an endoscopy 160 system for exactly $50,000. Based upon the initial personal credit findings, we decided to proceed with each of the application requests. The vendor had done a lease through us for their own needs several months earlier, and to the best of our knowledge everything had checked out until this point.
We submitted term sheet proposals for each customer to sign, requiring a deposit from each before proceeding on the transaction. Three of the customers remitted funds to us, and we proceeded to process their requests. However, upon further investigation, we found that the phone numbers for three of the customers were disconnected, and the phone numbers for their supplier references, entered on the applications, were forwarding to a personal cell phone.
This in itself would not have presented that much of a problem. However, as each day progressed, more and more items came to light which presented overwhelming evidence that these transactions were fraudulent in nature, and that these "equipment lease" applications were simply a cover for unsecured loans on equipment which did not actually exist.
During this period of time, we were unsuccessful at contacting any of the customers themselves - their phones were either disconnected, temporarily out of service, and one was being forwarded to a personal cell phone. However, once we indicated to the vendor that we would not be able to refund the money (since the commitment letters they signed clearly stated that their funds were non-refundable in the event such gross misrepresentations are found in the application package) they suddenly all surfaced to demand their money back.
Based on the above factors, and our determination that there was substantial evidence suggesting that these applications were not for equipment leases, as offered by the vendor, we retained the commitment fees as prescribed by our proposal term sheets, as compensation for the work we performed. Since this time, the vendor has been calling and emailing us with harrassing messages, cursing and threatening to report us to the authorities, etc.in the meantime, her main phone number has been disconnected now as well.
The practice of passing off unsecured loans as equipment leases is a serious offense, this has been going on for years, and we strongly caution all lenders / brokers in the marketplace.
0 comments