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In April, 1997, Lisa Erdman, a 36-year-old Lake Oswego resident, needed cash. She took her 1995 Ford Bronco, which she says was then worth about $25,000, to Select Leasing Oregon Inc., located at 10260 SW Greenburg Road. The company agreed to give her $2,500, for which she would repay $123.75 twice a month for two years. Select charged Erdman an annual interest rate of 120 percent--staggering but legal under Oregon's toothless consumer laws. Soon, Erdman was late with a payment. When she went to Select to settle the matter, she says, things got ugly. Erdman says Stephen Schneringer, the company's secretary-treasurer, confined her in his office while another employee repossessed her Bronco. Although the vehicle was worth far more than her outstanding debt to Select, Erdman says she's never received a dime. That's because although the deal was essentially a loan (with the Bronco as collateral), it was structured as a lease. And that, says local consumer lawyer Ed Benett, makes a huge difference. "That's what's particularly egregious about this practice," says Benett. "At least in a straight loan setting, a debtor is entitled to recover whatever surplus there is from a resale of her car. With a lease, all equity is lost." Erdman has filed suit against Select in Multnomah County Court, charging a variety of wrongdoings. Schneringer declined to comment on any aspect of the case. Unable to hire a lawyer, Erdman is representing herself. Select has hired the high-powered local law firm Schwabe, Williamson & Wyatt--a development that may prove costly for Erdman. Under Oregon law, a consumer who sues unsuccessfully pays the winner's legal fees. "As draconian as it may seem," Benett says, "Lisa very easily could
wind up losing another $10,000 just for pursuing the $22,500 of equity
she's already lost in her vehicle."
Select Leasing has graced these pages before, in a cover story
about abusive lending practices ("Shark Attack,"
WW, Sept. 2, 1998)
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