Military Sense & Savings: More on SmartBuy

6/1/2010

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On May 18th New York Attorney General Andrew Cuomo officially filed suit against SmartBuy, a seller of computers and electronics discussed in this column last month.   Read on to learn more about the suit and the response of SmartBuy’s lawyers.

Last month BBB Military Line erroneously stated that AG Cuomo had already filed suit against SmartBuy and its affiliates.  In reality, he had only declared his intention to bring legal action, which he did when he filed suit on May 18th against Frisco Marketing of N.Y., 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, all owned and/or operated by Fayetteville, N.C.-based John Paul Jordan, Stuart Jordan, and Rebecca Wirt, and Concord, California-based William Collins and Ronald Wilson.  According to AG Cuomo’s press release, the lawsuit seeks to “ban the companies from doing business in New York State, obtain restitution for all victims, and nullify all of the deceptive sales contracts.”

The press release claims that SmartBuy bought laptops, gaming systems, televisions, and electronics from other retailers and then marked them up 225-325 percent above the original price before selling them to members of the military.  It further alleges that:  “Although SmartBuy stated that its interest rates were between 10 and 19.2 percent, the effective interest rate averaged to 244 percent after adding the enormous, undisclosed markups, and an additional compounded 35 percent kickback retained by the financing end of the scheme (Rome Finance and Integrity Financial). None of the lenders involved are licensed in any state.”

Attorney General Cuomo asks consumers who did business with SmartBuy or any of its affiliated organizations to contact his office at 800-771-7755 or email smartbuy@ag.ny.gov

BBB Military Line received a letter dated May 17th from William W. Webb and Rufus L. Edmisten of the Edmisten and Webb law firm, who identified themselves as “General Counsel to the various corporate entities doing business under the trade name ‘SmartBuy.’”  They said they were appalled by our article, were aware of less than a handful of customer complaints, all of which were resolved, and stated that “SmartBuy categorically and unequivocally denies the broad, unsubstantiated allegations of Mr. Cuomo and his office and looks forward to presenting its side of the story.” 

In a related matter, SmartBuy has been on the “off-limits” list of the Fort Bragg, North Carolina, Armed Forces Disciplinary Control Board since September 2009.

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