Lease deal hell for charity facing ruin
HOW HAS has a charity’s leasing deal for two second- hand printers left it desperately fending off a £ 96,000 action, mired in broken promises and on the brink of ruin?
The Missing Kind ( TMK), which has centres in Norwich and Devon supporting the vulnerable and lonely, claims it was “duped” by supplier Plan Corporate Services ( PCS) which provided the extraordinarily expensive contract.
Instead of three new printers and ink, cover for initial leasing payments plus a £ 10,000 donation and a cancellation opt- out after 12 months, TMK got two used machines, worth at most £ 6,000, and is tied in to huge repayments for five years.
So far it has repaid £ 8,300. Finance for the deal was supplied by Grenke Leasing Ltd, part of German giant Grenke AG. Although PCS has a registered address in Cambridge and is listed on Companies House as actively trading, Grenke has turned its fire power on the charity in a bid to retrieve the hefty sum that it says represents its outlay and profit.
But the tangle embroiling TMK is not unique, it is symptomatic of a flawed industry where injustice runs rampant exploiting small customers thanks to the way agreements and liabilities can be structured and managed, says leasing expert Chas Jordan of Fair Contract Associates.
Now advising TMK as it fights for survival, “there are many charities, schools and even councils out there trapped in very poor value deals for equipment,” he explains. “Staff are not always wise to the pitfalls.”
PCS contacted TMK last year, suggesting a deal that had helped other small organisations get better equipment, and it agreed.
The charity claims it was led to believe the deal contained a goodwill gesture from the printer manufacturer, something that later proved to be untrue.
Signed
Regarding the contracts he signed, Tom Gaskin for TMK said he agreed to the favourable one which confirmed PCS’s offer. He was assured it superseded any other. Gaskin questions the second contract with Grenke, completed he felt in a high- pressure sales situation with PCS, and is challenging the authenticity of his signature on it. Grenke’s writ was served in June. But why only go after TMK? “It’s standard for lenders to have indemnity clauses in their contracts with the introducers,” explains Jordan. “We proposed the cost is split fairly among all three parties.”
Crusader and TMK have asked Grenke for any indemnity it holds with PCS, to date no document has been forthcoming. We also tried to contact PCS, so far without success.
“Grenke is purely a provider of funding to finance an agreement between hirer and supplier,” the company told Crusader. “Grenke takes no part in the negotiations and has no knowledge of them. It relies on the hirer [ to perform] its own due diligence.
“Grenke views court proceedings as a last resort. We are willing to engage in constructive and commercial negotiations leading to settlement proposals.”