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A Massachusetts company accused of scamming tens of thousands of consumers with deceptive work-at-home and Internet businesses opportunities has agreed to cancel $24 million in court judgments against its customers, regulators said Thursday. To settle charges brought by the Federal Trade Commission and eight states, Woburn-based Leasecomm Corp. and its parent company, MicroFinancial Inc., also agreed to pay a $1 million fine to cover the states’ legal and law enforcement costs. “Leasecomm knowingly participated in a scheme that used the get-rich-quick allure of selling products on the Internet to take advantage of thousands of consumers who were ultimately forced into debt,” Massachusetts Attorney General Tom Reilly said. “This agreement relieves the debts of customers who fell prey to these business opportunities.” Richard McCarthy, an attorney for Leasecomm, said the company denies any wrongdoing and settled to avoid the expense of a continuing investigation. The FTC said Leasecomm financed business opportunities involving Internet malls, medical billing, coupon clipping and “similar, often worthless, get-rich-quick schemes sold by third-party vendors.” Consumers had to sign contracts requiring payments of $3,000 to $4,000 over three years or four years, the FTC said. The contracts were written to ensure that customers had to pay even when vendors used fraud or the products failed to perform as advertised, according to regulators. In one business opportunity involving computer sales, a vendor signed up 1,882 consumers and nearly 1,483 defaulted on payments, the FTC said. “Leasecomm used sellers of highly suspect business opportunities to sell its financing and then claimed it had no responsibility for their deception,” said Howard Beales, director of the FTC’s Bureau of Consumer Protection. “Companies that try to hide behind the fine print in contracts and lie to consumers about what they were signing, whether directly or through agents, simply do not pass muster.” The FTC’s complaint said Leascomm’s vendors, often promoting business opportunities at seminars or conferences, gave consumers little opportunity to read or understand the complex contracts. Vendors also advertised on television, in newspapers and on the Internet. The vendors and contracts allegedly misled consumers about what they got for their payments, the FTC said. For example, consumers who agreed to pay $70 a month for four years were led to believe they paid for a complete business venture including training, manuals and software. But the payments only covered a small part of the business such as a credit card swiping machine or Internet payment system. Leasecomm sued consumers who refused or failed to pay, the FTC said. The contracts allowed the company to sue in Massachusetts rather than where consumers lived and purchased the business opportunity. Most people could not afford to travel to contest the charges and had default judgments entered against them. Leasecomm won about 27,000 default judgments during the past three years, most of them involving the business opportunities, the FTC said. If consumers did not pay the judgments, Leasecomm attempted to collect by garnisheeing people’s salaries or draining their bank accounts, the FTC said. The company also imposed high collection fees for late payments and each collection call and letter. Under the settlement, any new lawsuits from Leasecomm must be brought where customers live or signed a contract. Consumers who are the subject of more than 2,000 pending lawsuits can have the cases moved to a local jurisdiction. The settlement ends cases brought by the attorneys general of Massachusetts, Florida, Illinois, Kansas, North Carolina, North Dakota and Texas, and by the district attorney of Ventura County, Calif. Consumers affected by the case can get more information by calling the FTC at 1-202-326-3445 or visiting online at http://www.ftc.gov/ro/leasecomm . Copyright 2003 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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