A California company has filed a federal lawsuit against Xerox Corp., seeking class-action status, claiming the global document technology company charges excessive and illegal fees for services, equipment and supplies.

“Xerox induces individuals and entities to contract for equipment and supply services without disclosing the true cost of such services,” according to the 22-page complaint filed in U.S. District Court in Rochester on Tuesday.

“Xerox also buries unconscionable and self-serving contractual provisions in its fine print form contract, resulting in penalties if the customer terminates the contract before its lengthy term expires,” according to the suit.  read the rest here

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Original Post

I guess another question to ask is: If we are acting as consultants to our clients, is it our duty to point out the "gotchas" in the fine print for the buyer? In my opinion, that is what differentiates the consultant from the salesperson. If Xerox had asked the client to sign an acknowledgment that these items were discussed, maybe the lawsuit could be avoided.

Good point, however I've seen many over the years with selective memory when I've pointed out the t&c's at the signing of the documents. 

In other cases I've had many accounts that read the entire t&c's and questioned most of the pitfalls.

its those terms that are ambiguous that get clients going, such as "we may raise the service rate on an annual basis". Very opened ended, no cap on increase, in 99% of the time, there is an annual increase

I had a customer who felt the Xerox hung the moon and switched vendors prior to lease end. All my attempts to meet with the guy were thwarted. The Xerox rep did nothing to inform him what was about to happen so he ended up with lots of gotchas because he wouldn't meet with me and the Xerox rep didn't care enough to hold his hand through it all. My point is, sometimes it is the responsibility of the new vendor to educate the customer.

BCarroll posted:

I guess another question to ask is: If we are acting as consultants to our clients, is it our duty to point out the "gotchas" in the fine print for the buyer? In my opinion, that is what differentiates the consultant from the salesperson. If Xerox had asked the client to sign an acknowledgment that these items were discussed, maybe the lawsuit could be avoided.

The acnowledgement was when they signed the contract.  If someone who is authorized to sign legally binding contracts for a company is not informed enough to read them before authorizing it is a training issue.  I advise clients and build separate Master Lease Agreements for my large clients to eliminate some of the fluff charges.  Other smaller clients I tell them it is a cost of doing business.

 

Xerox isn't the only vendor who is using this sort of practice to make money. Many of the OEM's have similar contracts.  Lease and service contracts are intentionally created to hide fees and leave the customer open too being billed for extras.  An extra charge for using thick paper, to ship the customer toner, no mentioned of service price increase when combo billing under lease contracts, ect.. are all used to find profit opportunists.  I am shocked it has taken this long for a case to be filed.

Who's largely to blame for these practices? 

WE ARE. We are if we pick our leasing partners based on the rate factor rather than the contract terms. All of these "alternative forms of revenue" are the leasing company's way of  getting back the profits lost by OUR demand for lower rate factors. You can try to blame them all you want but it is all in response to our demands.

Dealers get the lower rates from the leasing companies and then mark them up to their sales force who in turn may or may not mark them up to the lessee.   One reason why equipment lease will probably be regulated in the near future.  Which means more paper!! yay!

I do agree with Brian, no other documents should be required besides the lease.  The Lessee needs to read the lease, if they don't understand the lease then they need to ask questions or give it o their attorney for review.  But once you sing you are agreeing to the terms and conditions of the lease.

Last edited by Art Post

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