I ran across yet another scam from a copier dealer. First let me point out that 99.9 percent of the dealers out there are great at what they do and great to do business with. However in any industry there are always a few bottom feeders that go to any length to fatten their wallets and steal from others. I just wish that one day we could rid our industry of those problematic bottom feeders. I’m hoping that by writing about it will be greater attention to some of the issues at hand.
A big part of our business to help prospects to lower their costs related to hardware, service, and supplies. Since most copiers aka MFP’s are leased there is usually a fixed cost associated with the lease and in some cases the monthly or quarterly service and supplies. Once we have the price that the customer is paying, most sales people will try to see if they can lower the cost by swapping out the old lease with a new lease (upgrade the existing lease).
This is where it gets sticky, when you’re working with a new account; the lease you are proposing to upgrade is not yours. Not yours, meaning your company was not the originated vendor for the lease. It was another copier dealer. In the course of negotiating the new lease the professional sales person will get together with the prospect and figure out the remaining stream of payments that is owed on the old lease to the leasing company. Once they have agreed on the number of payments a check for the remaining payments will be paid back to the prospect when they enter into a new lease. That check to the prospect can be handled in a few ways. The company can offer to pre-pay the remaining payments on the lease or just continue to pay the monthly payments on the old lease until the copier has to be returned. In most cases the old copier is stored at the same location where it was installed. Removing the copier from that address needs prior approval from the leasing company. Removing it without the consent of the leasing company may place it in default of the lease. Ninety-nine percent of the time all goes well and there are no problems.
Here’s the scam I’ve seen and where the problem starts is that the sales person aka dealer owner tells the customer that they will remove and store the system (no letter goes to the leasing company about the system being removed nor does a letter of intent if one is needed at the time the system is removed). That dealer then tells the customer that they will make the payments on the old lease for the remaining stream of payments. Thus the bottom feeder of a dealer cuts a check back to the customer either monthly, or quarterly or in some cases they don’t make any payments because they are horrible payers.
But the real scam is the copier. Remember the copier that is supposed to be sitting in the dealer’s warehouse? (Keep in mind that the copier may have to sit in the warehouse for 6, 12 or even 24 months). The bottom feeder of a dealer then takes the leasing companies property and rents it to another company for a term that is shorter than the term that is left on the lease!
The leasing company is getting hosed because instead of getting a system back early or getting a system back with a low meter read, they get the system back with higher usage. Think of it this way, you leased a car, traded it in early with 30K mileage, the car dealer did not return the car to the leasing company but they put in their rental fleet. Here the car gets additional wear and tear and is then returned on the end of lease date.
The customer is in violation of their lease and could be called into default. And what happens if the dealer goes out of business (like a dealership did here in NJ)? The customer is left holding the bag for the remaining stream of payments, probably no copier to be found, a legal mess and still making payments on the new copier.
Here’s my point, these bottom feeders need to go. There is no room for them in the industry as there is no room for PED’s in baseball. Just as you would have a Lowjack system on a car, maybe it’s time that the leasing companies put them on their copiers. This way they can track the movement of them, and it one is turned off then that would raise a red flag. I’m not sure if the leasing companies are willing to pay for this and if they are then I’m sure everyone will pay with higher monthly payments for copiers.
If you know of a dealer who is doing this, turn them in and get rid of the bottom feeders of the industry.
Good selling!
