PRESS RELEASE FOR IMMEDIATE RELEASE

Contact: Barbara Gadbois, Deputy Attorney General

Phone: (302) 577-8323

Date: May 26, 2005


BRADY SETTLES TELECOMMUNICATIONS FRAUD CASE



(Wilmington, DE): Attorney Jane Brady announced today that a settlement has been reached in connection with a widespread telecommunications fraud involving NorVergence, Inc., a bankrupt New Jersey-based telephone equipment and service company. The settlement with CIT Group/Equipment Financing, Inc.(CIT), Lyon Financial Services d/b/a U.S. Bancorp Business Equipment Finance Group (USB), and Wells Fargo Financial Leasing, Inc. (WFFL) was reached through the joint efforts of Attorneys General in 25 states. Under the terms of the settlement, CIT, USB, and WFFL will not collect millions of dollars in rental payments they claimed to be owed by 1,388 NorVergence customers. In Delaware, 11 consumers will save over $125,000.

NorVergence rented matrix boxes to consumers for local telephone, long-distance telephone, wireless, and internet services. NorVergence's deceptive sale pitch was that the matrix box would provide telephone and internet services while reducing telephone and internet service bills by 30%. Consumers entered into long-term rental agreements with monthly payments.

NorVergence then sold the rental agreements to approximately 40 different finance companies, including CIT, USB, and WFFL. When NorVergence was forced into bankruptcy in June 2004, its customers were left without service but the finance companies, including CIT, USB, and WFFL, maintained that the customers were still responsible for the rental agreement payments. 

Attorney General Brady said, "Today's settlement highlights Delaware's concern for protecting the rights of consumers who were subject to deceptive business practices" 

All consumers who signed agreements with NorVergence that were bought by CIT, USB, or WFFL or signed NorVergence agreements directly with CIT, USB, or WFFL, will receive a notice in the mail regarding the opportunity to participate in this settlement. Each consumer has the right to accept or reject the settlement. To accept the settlement offer, consumers must follow instructions contained in the notice and execute a Settlement and Mutual Release by the date indicated in the notice. Consumers who have questions about the settlement offer or its terms are urged to call Barbara Gadbois in the Attorney General's Consumer Protection Unit at 800-220-5424 or 302-577-8600 for more information. 

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