WATERTOWN -- New York State Attorney General Eric Schneiderman says he has completed an investigation into a company that has scammed local soldiers out of thousands of dollars. Schneiderman made the announcement at his Watertown office Tuesday afternoon.
Schneiderman says the company "Smart Buy" set up kiosks in places like the Salmon Run Mall in Watertown and targeted Fort Drum soldiers. The company would sell electronics like computers, but it would offer payment plans that made the products far more expensive than their initial price.
Schneiderman says the company would buy merchandise from stores like Sam's Club, Costco, and Walmart. The items were then marked up by 200-325%, and then soldiers would have to pay an added interest of 10-25%.
Spc. Joseph Latarte says he was one of those soldiers. He said he bought a $2,000 computer, but based on his payment plan, it would have ended up costing him more than $6,000. He was even making payments while he was deployed in Iraq.
"It makes you angry," says Latarte. "There's no other way to describe it. It makes you angry that they do that to us."
Schneiderman says his office has reached an agreement with Smart Buy to clear $3.5 million of debt for the 995 soldiers who were affected. He says Rome Finance Co. Inc. of California also agreed through its bankruptcy trustee to take steps to restore the credit histories of hundreds of people. However, he says the soldiers will not get the money back they have already paid.
"The fact that we now have a lot more men and women in active service has given rise to this new group of scam artists," says Schneiderman. "This is about as despicable as it gets to take folks who are sacrificing so much for their country."
Schneiderman says in one case, a US Army soldier bought a laptop for $3,868.93. She later found the same laptop for $1,000. He says the financing company would not allow her to pay off her balance early to avoid paying additional interest.
SmartBuy has denied wrongdoing. It has also operated near posts in North Carolina, Texas, Colorado, Oklahoma, Georgia, California and Tennessee.
Schneiderman says everyone needs to look out for signs of scams. He says if someone tells you that you need to buy something immediately to get a good deal, that could be a red flag. Also, if companies don't accept traditional forms of payments and will only accept a payment plan, that could also be a red flag.
Earlier this year, Schneiderman announced that Buffalo-based debt collector Stephanie Lowinger had pleaded guilty to charges of scheming to defraud military families and was permanently banned from future debt collection activities.
Investigators said Lowinger and collectors she employed falsely told members of military families that those on active duty faced arrest by military police and a dishonorable discharge if they didn't pay alleged debts.
Do you know of anyone who has been affected by scams like this? What do you think of the settlement? Post your comments below!
Information from the Associated Press was used in this report.
