The Worst Credit Card Terminal Leasing Companies — and How to Get Out of One
The Equipment Costs $300. The Lease Costs $7,000.
The terminal on the counter cost the leasing company a few hundred dollars. Over a four-year, non-cancellable credit card terminal leasing contract, the merchant pays seven thousand. When the lease finally ends, the billing sometimes does not. That gap — between what the hardware is worth and what the contract extracts — is the entire business model of the worst credit card terminal leasing companies, and it is the reason a New York court ordered the most notorious one dissolved.
A credit card terminal leasing company is not the same thing as your payment processor, though the two are usually introduced in the same sales meeting and signed on the same afternoon. The processor handles your transactions. The leasing company owns the box on your counter and bills you for it on a separate, far less forgiving contract. Knowing which one you are dealing with — and what the worst of them do — is the difference between a $300 problem and a $7,000 one.
What Makes a Leasing Company the Worst
The worst credit card terminal leasing companies are not set apart by which terminal they place. They are set apart by the contract underneath it. The same handful of clauses shows up again and again, and once you can recognize them, the bad actors stop being able to hide behind a friendly rep and a “free” install.
“Non-cancellable” paired with a personal guarantee. You cannot exit the lease even if you close the business, sell it, or never plug the terminal in — and you, personally, are on the hook for every remaining payment, separate from the company.
- A 48-month, non-cancellable term on a device that costs a few hundred dollars new
- A personal guarantee that survives selling or closing the business
- Billing that auto-renews or continues after the term ends
- Equipment locked to one processor, so it is worthless if you switch
- Add-on “insurance,” “tax,” or “service” line items you never agreed to
- A leasing company whose name is different from the processor on your statements
None of these is illegal on its own. Stacked together, they describe a credit card terminal leasing agreement engineered to outlast its own usefulness — and to make leaving more expensive than staying.
How the Most Notorious One Got Shut Down
The clearest proof that this pattern is not hypothetical is a matter of public court record. In 2016, the New York Attorney General sued Northern Leasing Systems and several affiliates — including Lease Finance Group and MBF Leasing — alleging they trapped small businesses in overpriced, never-ending leases for credit card processing equipment and abused the New York City courts to collect against merchants who lived hundreds of miles away.
In June 2020, the Attorney General won. The court rescinded the leases, vacated roughly 29,600 default judgments obtained against out-of-state merchants, and ordered Northern Leasing dissolved, finding that its method of doing business “created an enterprise conducive to fraud.” In 2024, the Attorney General secured a further $4.6 million in restitution from spinoff entities that had tried to keep the scheme running under new names.
What made the scheme durable was the venue. By writing the contracts to require that disputes be heard in New York City, the company could win automatic default judgments against a credit card terminal leasing customer in Oregon or Florida who could not realistically travel to defend themselves — then collect on the strength of a judgment the merchant never had a chance to contest. That is the abuse of process the court singled out, and it is why the relief included vacating those tens of thousands of judgments wholesale.
The leased credit card equipment was worth a few hundred dollars at most; over the life of a lease, merchants paid thousands. The targets were small, family-owned businesses — flower shops, salons, auto-repair shops, delis, restaurants — and many of the owners were immigrants, elderly, or veterans.
Northern Leasing is the named example here because the case is settled and public. The point is not that one company was uniquely bad. It is that the credit card terminal leasing model the court described is still being sold every day, under names that have not yet drawn a lawsuit.
How to Tell If Your Lease Is One of These
You do not need a court case to find out whether your own credit card terminal leasing contract belongs on this list. Three checks settle it, and all three can be done with the paperwork in your filing cabinet and one recent statement.
First, find out who you are actually paying. Pull the agreement and locate the leasing company’s name — it is frequently different from the processor printed on your monthly statements, which is the first sign the box and the transactions are two separate contracts. Second, read the cancellation section and look for the words “non-cancellable” and “personal guarantee.” Third, do the math the New York court did: add up every remaining lease payment and compare it to what the terminal is actually worth. Our POS lease buyout calculator runs that comparison for you in a couple of minutes.
It also helps to know the rest of the playbook. The contract clauses worth catching before you ever sign are in our guide to merchant agreement red flags, the broader bundled equipment lease trap is its own deep dive, and the bait that often starts the whole thing — the real cost of a free credit card terminal — is where many of these leases first get in the door.
“Non-Cancellable” Is Not Always Unbreakable
“Non-cancellable” is a phrase in a contract, not a law of nature. The roughly 29,600 merchants whose Northern Leasing judgments were vacated are evidence that even the most aggressive credit card terminal leasing agreements can be challenged when the conduct behind them crosses a line. Most situations never need a court — they need leverage and a clear picture of the numbers.
Get your real effective rate so you know what the processing side is costing you, identify the leasing company that actually holds the contract, run the buyout math, and get a second opinion before you sign anything new. Often the processing relationship and the lease can be solved separately — the lease binds you, the rate usually does not have to.
You can calculate your effective rate from one statement, and the practical steps for getting out of a POS lease apply to terminal leases the same way. The goal is simple: stop paying thousands for a box worth a few hundred dollars.
Frequently Asked Questions
Not the hardware — the contract. The worst credit card terminal leasing companies pair a long, non-cancellable term with a personal guarantee, bill far more than the equipment is worth, and sometimes keep charging after the lease ends. The New York Attorney General’s case against Northern Leasing Systems documented exactly this pattern.
“Non-cancellable” limits your options but does not always make a lease unbreakable — courts have voided thousands of these agreements where the conduct was deceptive. More often the practical path is a buyout: compare the total remaining payments to the equipment’s real value, then decide. Our buyout calculator runs that math.
Read the lease agreement, not your processing statement. The leasing company’s name is often different from the processor that handles your transactions — they are two separate contracts signed at the same time. The name on the lease is who you have to deal with to get out of it.
Before You Sign — or If You Already Did
Send Us the Lease. We’ll Tell You What It Costs and Whether You Can Get Out.
If a credit card terminal leasing contract is draining your business, send Brookside the lease and one recent statement. We’ll identify who actually holds the contract, calculate what the equipment is really worth against your remaining payments, and lay out your realistic options for getting out. The review takes us about fifteen minutes and costs you nothing. Learn more about payment processing consumer protections from the CFPB.
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