New York Attorney General Eric Schneiderman's office reported Tuesday that an agreement is in place with a finance company to clear $3.5 million in debt for nearly one thousand soldiers.
The soldiers had purchased computers and other electronics from a retailer outside the Army's Fort Drum military base in northern New York state, at highly inflated prices and credit terms, according to Schneiderman's office.
Rome Finance Co. Inc., of Concord, Calif., also agreed to help restore the credit histories of hundreds of individuals. Calls to Rome Finance's representative weren't immediately returned.
A lawsuit filed last year by the attorney general's office and pending in state Supreme Court accuses electronics retailer SmartBuy and affiliates of defrauding service personnel through "wildly inflated" prices and high interest rates paid directly from military paychecks. The lawsuit seeks restitution and credit repair.
SmartBuy, which last year closed a kiosk at a shopping mall near Fort Drum, has denied wrongdoing. It also had operated near military posts in North Carolina, Texas, Colorado, Oklahoma, Georgia, California and Tennessee.
SmartBuy attorney Gabe Nugent told the Wall Street Journal that the allegations against the company "aren't any more truthful or accurate than when they were first made two years ago."
He said the company, which has executive offices in Fayetteville, N.C., no longer sells consumer goods but is "not in bankruptcy."
The New York attorney general's office said the store's clerks had aggressively pushed sales of electronics including laptops, game systems and flat-screen televisions to soldiers. They declined to take cash payments and pressured buyers into payment contracts with hidden fees and exorbitant interest rates.
The agreement with Rome Finance settles the debt for 995 soldiers, who owed an average of about $3,500 each.
