New York Attorney General Andrew Cuomo filed a lawsuit against three lenders and their affiliated companies for targeting members of the military by selling them high-priced electronics, then luring them into illegal credit plans.
The suit names Frisco Marketing of New York LLC, doing business as SmartBuy and SmartBuy Computers and Electronics; Integrity Financial of North Carolina Inc.; Britlee, Inc., doing business as MilitaryZone; GJS Management Inc. and Rome Finance Company Inc. and Rome Finance Co. LLC.
The Attorney General’s investigation found that SmartBuy and its affiliates bought laptops, gaming systems, televisions and electronics from other retailers and then relabeled them for sale at grossly inflated prices. The company aggressively targeted members of the military – some of whom were about to deploy to Iraq and Afghanistan – and their families to get them to purchase the items.
The investigation found that salespeople were trained to specifically seek out people in uniform and people with military-style haircuts.
The AG’s investigation found that SmartBuy sold products that were marked up 225% to 325% above the original retail price and financed the sales illegally. The sales were made only to members of the military through monthly direct withdrawals from payroll, and backed up with agreements giving the company access to the soldiers’ bank accounts.
The soldiers were rarely told the final price of the product up front, nor was it explained that they were really opening a line of credit. If a soldier defaulted, SmartBuy and its affiliates illegally contacted the soldiers’ commanding officers. The tactic put service members in an untenable situation because Army regulations forbid soldiers from putting themselves in a financially precarious situation.
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