Scammed military members receive $92 million debt relief
Debt relief for hundreds of North Carolina military service members caught in the middle of a finance scheme
FORT BRAGG (WTVD) -- North Carolina Attorney General Roy Cooper announced Tuesday a multi-million dollar debt relief for troops, ending a four-year investigation into a Fayetteville-based predatory lending operation.
Cooper said service members in twelve states will be relieved of debt resulting from purchases made from SmartBuy, a Fayetteville-based electronics retailer that practiced predatory lending. The total settlement across twelve states is $92 million, relieving more than 23,000 service members of extreme debt. In North Carolina, the settlement was $6.8 million, forgiving more than 1,300 service members of their loan debt.
Other states involved in the settlement include Delaware, Indiana, Colorado, Kentucky, Tennessee, Iowa, Massachusetts, New York, and Vermont.
SmartBuy operated under several aliases including Rome Finance, Colfax Capital Corporation and Culver Capital, LLC. Cooper said they sold electronics out of mall kiosks, and targeted military members to purchase laptops, gaming systems, and computers at up to 200% interest.
"When they had a serviceman or woman in their clutches, they knew they had a person with a steady paycheck," said Cooper. "They knew they had someone with a personal bank account, and they knew they had a person that may not be as experienced as other consumers."
Cooper said the company would target service members based on a look-like a military-style haircut or a uniform and would trick them into purchasing items under a 16% interest, no money down agreement. Hidden language in the contract allowed the company to charge several times the agreed upon payment and debit that from the victims' accounts.
"They would buy these things at wholesale and would re-sale them for two and three times the value," said Cooper.
In Fayetteville, SmartBuy operated a kiosk from Cross Creek Mall. The multi-million dollar settlement has forced the company into bankruptcy. It has liquidated Rome Finance, and banned the owners, Ronald Wilson and William Collins, from operating a lending business.
Victims will have full debt forgiveness, credit reports cleared, and be allowed to keep their SmartBuy purchases. Because of the company's bankruptcy, it's still unclear if service members may receive their own settlements, resulting from payments already debited from their accounts. Rome Finance paid $1 into a civil penalties fund used to make those types of payments.
"These cases will be up for the potential distribution of the money from the civil penalty fund," said Cooper, noting it's a matter up to the Consumer Financial Protection Bureau. "We would like for that to happen, but this company is in bankruptcy and there was no money to get."
Cooper, who made the announcement alongside Fort Bragg commander Major General K.K. Chinn, warned consumers to read contracts carefully and be skeptical of deals that seem too good to be true. Chinn noted the ongoing counseling and resources Army leadership makes available to soldiers and families, teaching them about consumer fraud.
"These folks preyed on them and knew which ones they could convince (to purchase overpriced items)," said Chinn. "Because most of us are pretty aware today on internet, (and) other types of consumer fraud. We're very, very aware."
Cooper said there could be other SmartBuy victims out there. Complaints may be filed by calling 1-877-5-NO-SCAM. The AG's office also has a guide for military consumers that's available at www.ncdoj.gov/military.aspx.
