Vermont Business Magazine A bill that would protect small businesses targeted by aggressive lease financing companies has passed unanimously out of the Senate Committee on Economic Development, Housing, and General Affairs. The bill, S206, addresses many of the common themes found in complaints filed with the Attorney General’s Consumer Assistance Program by small businesses who lease credit card terminals. Currently, a small business may pay thousands of dollars for a terminal that commonly retails for less than $500. This high pricing would be eliminated by the bill through a cap.
The cap would limit the total cost a small business would be required to pay over the course of a 4-year lease to 3 times the lease financing company’s cost of the equipment. The bill would also improve transparency, requiring reasonable font size and a glossary identifying each player mentioned, as well as requiring the lease financing company to provide the small business with an executed copy of the lease. In addition, the bill provides a 45-day right to cancel, allowing small businesses at least one banking cycle to see the real monthly cost of the lease debited from their bank accounts.
“Small businesses are the back bone of Vermont’s economy,” said Attorney General T.J. Donovan. “Once we saw what was happening with these terminal leases through the complaints my office received, we worked with the legislature to help find a solution.”
The Senate Committee heard testimony from several stakeholders, including three small businesses who had filed complaints with CAP. Lee Youngman, owner of a yarn and knitting shop in Montpelier called Yarn, testified about her experience leasing a credit card terminal. “The terminal never worked and, despite saying they would rescind my contract, they debited money from my account anyway. After I sent the terminal back, they said they never received it. They wanted $7,000 to buy out of the lease – on a piece of equipment I now know costs only a few hundred dollars.”
The bill is scheduled to be voted on by the full Senate on March 13. It is expected to be taken up by the House Committee on Commerce later this month. If passed into law, the bill will go into effect on July 1 of this year.
Source: AG 3.9.2018