New York Attorney General Andrew Cuomo sued national electronics retailer, SmartBuy, on Tuesday alleging it intentionally ripped off military personnel. The suit alleges that SmartBuy would buy products such as laptops, televisions, gaming systems from retailers such as Wal-Mart Stores Inc, Sam’s Club and Costco Wholesale Corp, and then mark then up 225 percent to 325 percent for resale to military personnel.
Cuomo said SmartBuy, which is based in Fayetteville, North Carolina, would then steer customers to affiliated lenders that charged effective annual interest rates averaging 244 percent. In a May 10 letter to Defense Secretary Robert Gates and Army Secretary John McHugh, Cuomo said SmartBuy has operated at least nine stores near military bases in seven U.S. states, including Fort Bragg in North Carolina and Fort Hood in Texas.
He said sales staff were trained to target shoppers in uniforms or with military-style haircuts, including personnel about to deploy to Iraq or Afghanistan. "Our lawsuit not only seeks to bar them from ever doing business again in the state, but also to vindicate the countless soldiers who were preyed upon and defrauded," Cuomo said in a statement. Cuomo also said SmartBuy’s store in Watertown, New York, near Fort Drum, financed more than $4 million of sales to military personnel from 2007 to 2009. He said the company abruptly closed the store after learning of the planned lawsuit.
Wow! If Cuomo has this story even half correct, SmartBuy really sucks for taking consumer fraud to a whole new level. Intentionally preying on military personnel during wartime is about as low as it gets. It should be noted that SmartBuy’s lawyer denies his client decieves customers or charges interest rates of 244%.