WATERTOWN — New York Attorney General Eric Schneiderman has reached a $9.5 million settlement with a retail and financing firm that he said fraudulently charged soldiers purchasing electronics at Salmon Run Mall near Fort Drum.
The settlement is the second the attorney general’s office reached with a firm known as SmartBuy and its affiliated companies. SmartBuy resold computers and electronics to service members at inflated prices while locking them into revolving-credit agreements with high interest rates and undisclosed fees, the attorney general’s office said.
Together, the two settlements eliminate $12.9 million in debt for members of the armed services across the country. Today’s settlement calls for SmartBuy and its affiliates to remove debts from 358 soldiers from New York and 3,963 soldiers from across the country. It also calls for defendants to clear soldiers’ related negative credit reports and pay the state a $150,000 penalty.
“SmartBuy took advantage of service members using deceptive practices, roping them into high-interest contracts and ruining their credit,” Schneiderman said in a news release. “These actions are nothing short of unconscionable. I am proud that we were able to wipe out the debts of thousands of men and women who stand up for us every day.”
The attorney general’s office first filed a lawsuit against SmartBuy and its affiliates in 2010. Litigation is still under way against one affiliate company, Rome Finance LLC, and two individuals, Ron Wilson of California and William Collins of Georgia, according to the attorney general’s office. Settling firms include Frisco Marketing of N.Y., LLC, which was doing business as SmartBuy and SmartBuy Computers and Electronics, Integrity Financial of North Carolina, Inc., Britlee, Inc., and GJS Management, Inc. The settling companies are owned or operated by John Paul Jordan, Stuart Jordan, and Rebecca Wirt of Fayetteville, N.C.
SmartBuy has closed its local operations, the attorney general’s office said.
Contact Seltzer at rseltzer@cnybj.com