Once upon a time a print technology solution company went bust…

Just before this happened, they signed an unsuspecting company onto a 3-year lease for a new high-end print & scan digital machine.

On the face of it, this doesn’t sound like a problem, as the machine was financed through a third-party leasing company, and the company in question can seek a service contract elsewhere.

For clarity, a service contract usually covers (well ours do) consumables (toners, drums, fusers, and belts) spares and repairs over a set term, charged per page or in an agreed monthly fee.

Although, there was a sting in the tail…

It seems, in this instance the supplier had rolled the monthly service charge into the lease agreement. What does this mean?

Let’s say the monthly lease charge was £100 and the service charge was another £75. Instead of paying the lease company and the supplier separately, the customer pay the lease company £175.

Basically, the supplier has added the entire 3-year service fees (£75 x 36 = £2,700) onto the price of the machine and financed it all through the lease company.

This means the supplier gets paid out immediately for both the machine and 3-year worth of service.

So what?

Well, now that the supplier has gone bust the customer is unable to print, as they’ve already paid up-front for 3-year worth of service (consumables and repairs etc), so are £2,700 out of pocket.

The leasing company can’t help either, as they only finance equipment and their paperwork only shows a total figure the customer paid for the digital machine.

This leaves the customer with no alternative but to enter a new service contract with a new supplier. Thus, paying twice for the same thing, which must be difficult to accept.

We discussed this with our market leading technology lease company, who see this as extremely bad practice. They are very thorough with the suppliers they choose to work with, to make sure all are honest and transparent, so no situations like this arise on their watch.

…be wary of any supplier who want to bundle in your service costs into the equipment lease.