AG Cooper Wins $6.8 Million Settlement for NC Servicemembers in Electronics Retail Scam
(Targeted News Service Via Acquire Media NewsEdge) FORT BRAGG, N.C., July 29 -- The North Carolina Attorney General issued the following news release:
More than 1,300 North Carolina military servicemembers who got caught by a scheme to finance purchases of overpriced electronics will have their debts forgiven and their credit cleared, Attorney General Roy Cooper announced today.
Following a multi-year investigation, Cooper's office has secured a $6.8 million global settlement with Rome Finance, which also did business as Colfax Capital Corporation and Culver Capital, LLC. The companies financed debts for military consumers' purchases of computers, gaming systems and other electronics, including those sold by SmartBuy, a Fayetteville-based electronics retailer that charged thousands of military personnel inflated prices. SmartBuy operated a chain of retail stores in shopping malls near military bases around the country, including locations near Fort Bragg and Camp Lejeune.
"Members of our military make so many sacrifices to protect our nation, and they deserve protection from scams and bad deals," said Cooper. "This settlement cleans the slate for military consumers tricked into bad financing deals on overpriced electronics and sends a strong message to illegal debt lenders."
Cooper contends that SmartBuy tricked customers into paying two to three times the value for electronics. Salespeople allegedly targeted military personnel based on their uniforms or military-style haircuts, promising great deals on pricey electronics like computers and televisions.
Consumers then filled out a credit application and signed a financing agreement with Rome, Colfax or Culver but weren't given accurate information about what they would have to pay for that financing. Through cryptic paperwork and pushy sales tactics, customers were roped into excessive financing agreements with interest rates upwards of 200 percent, which is far in excess of North Carolina lending laws. Customers were left with bad credit and mountains of debt.
Some members of the military can be susceptible to schemes like this one for several reasons, Cooper explained. Servicemembers stationed at military bases may be young, new to financial dealings, and earning a steady paycheck for the first time. SmartBuy took advantage of this and withdrew payments directly out of customers' bank accounts.
The settlement requires approximately $92 million in debt forgiveness for more than 17,000 U.S. military personnel and other consumers nationwide, including debts of $6,852,092.06 owed by 1,328 North Carolina servicemembers. Servicemembers may keep the merchandise they purchased.
Under today's settlement, Rome Finance will no longer seek to collect approximately $60 million in contracts owed by about 12,000 consumers. A liquidating trust created as part of Colfax's bankruptcy plan will stop collections on approximately $32 million owed by more than 5,000 consumers for Colfax and Culver financing agreements.
The settlement also requires the defendants to clear all negative items related to the financing agreements from military consumers' credit reports. In addition, the settlement liquidates Rome Finance and bans Colfax, Culver, and two of their owners, Ronald Wilson and William Collins, from the consumer lending business. [See the final order from the U.S. Bankruptcy Court.]
The North Carolina Department of Justice's Consumer Protection Division reached the settlement agreement in conjunction with 12 others states and the Consumer Financial Protection Bureau.
Cooper's Consumer Protection Division fights unfair business practices like scams and frauds and bad business deals. Military personnel and their family members can file a consumer complaint with the Attorney General's Office by calling 1-877-5-NO-SCAM toll-free within North Carolina or filling out the complaint form at www.ncdoj.gov. Cooper's office has also put together a guide for military consumers, available at ncdoj.gov/military.aspx and distributed to military installations statewide.
"The brave men and women who serve our country in the military should not have to worry about being taken advantage of by shady businesses here at home," Cooper said. "My office is here to help military consumers and their families whenever they need us."
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(c) 2014 Targeted News Service
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