John Sours, Administrator of the Georgia Governor’s Office of Consumer Protection (GOCP), announced last month that Smart Industries, LLC doing business as “Techsmart” and its principal, Guru Dharam Khalsa, have entered into a settlement with GOCP. The settlement was based on the company failing to disclose hidden finance charges in violation of the Truth-in-Lending laws. As a result consumers didn’t get the true cost of the company’s products. Techsmart, whose offices are headquartered in San Diego, Calif., resells products, such as electronics, primarily to military personnel via kiosks located near U.S. military bases and via the Internet.
It was alleged that Techsmart sold a number of its products for at least two times the price charged for the identical products at most retail and online stores. It represented that these prices were the items’ “original” prices when, in fact, they contained a significant additional amount allegedly attributable to the military person’s lack of credit history. Instead of disclosing this markup as part of its finance charge, the company allegedly represented that military personnel were actually paying lower interest rates.
Techsmart advertises itself as the “number one choice for military financing” and encourages its customers to pay for their merchandise in installments by financing their purchase through the company. That made Techsmart a particularly appealing option to those service members with either no credit or bad credit, who may have had no other financing options. GOCP alleges that Techsmart falsely claimed that purchasing its products would automatically improve consumers’ credit and that military personnel were entitled to claim an income tax deduction for products purchased from the company.
In resolution of these allegations, the company and its principal have entered into a settlement with GOCP, requiring the company to cease doing business in the state of Georgia, to offer customer restitution in the amount of $171,335.57, and to pay $25,000 in penalties and investigative expenses. Administrator Sours had this to say:
While the law does not limit what a business can charge for its products, a business is not allowed to assess finance charges, unless it clearly discloses those charges to consumers. This settlement encourages a level playing field for businesses in Georgia and shows our commitment to protecting service members and their families from being preyed upon by merchants who resort to unscrupulous practices.
It’s really good to see a government agency going after companies that are taking unfair advantage of consumers and, in this case, members of our armed services. John Sours, a well-respected public servant, as well as his staff, are to be commended for their actions.
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