New York Attorney General Andrew Cuomo sued three national lenders and their affiliates for targeting members of the military by selling them high-priced electronics, then luring them into illegal credit plans.
The suit filed Tuesday in the state Supreme Court named as defendants 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., Rome Finance Co. Inc. and Rome Finance Co. LLC, all owned and/or operated by John Paul Jordan, Stuart Jordan and Rebecca Wirt of Fayetteville, N.C., and William Collins and Ronald Wilson of Concord, Calif.
Cuomo's investigation found that SmartBuy and its affiliates bought laptops, gaming systems, televisions and electronics from other retailers and then relabeled the items for sale at grossly inflated prices. The company then tried to sell the items to members of the military — some of whom were about to deploy to Iraq and Afghanistan. The probe found that sales representatives were trained to specifically seek out people in uniform and people with military-style haircuts.
The investigation found that SmartBuy peddled products that were marked up 225% to 325% above the original retail price and financed the sales. The sales were made only to members of the military through monthly direct withdrawals from payroll, and backed up with agreements giving SmartBuy 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, Cuomo's suit said.
