Donald Wiener, who runs the dress chain Dresses For Less, is suing CIT Group and other accomplices, accusing them of running a factors’ monopoly called the Uptown Credit Group. The group meets twice a week to decide which garment companies deserve credit and which don’t.
Wiener says that CIT squeezed a group of apparel manufacturers which he co-owned out of business by refusing to guarantee their sales to CIT’s factoring clients. He claims the decision cost him $3m on factoring fees and $5.5m on lost sales.
The complaint alleges that CIT controls 85% of the factoring market for piece goods which go into unfinished garments. As such, the Uptown Credit Group follows CIT’s lead on credit decisions. Based on a Supreme Court decision designed to protect lenders, CIT’s lawyers claim that sharing credit information is perfectly legal.
