Techsmart Settles with Governor’s Office of Consumer Protection, Agrees to Cease Doing Business in Georgia

June 10, 2013

ATLANTA, GA – John Sours, Administrator of the Governor’s Office of Consumer Protection (“GOCP”), has announced that Smart Industries, LLC d/b/a “Techsmart” and its principal, Guru Dharam Khalsa, have entered into a settlement with GOCP based on allegations that the company failed to disclose hidden finance charges in violation of the Truth-in-Lending laws, thereby not revealing to consumers the true cost of its products. Techsmart, whose offices are headquartered in San Diego, California, resells products, such as electronics, primarily to military personnel via kiosks located near U.S. military bases and via the Internet.

Techsmart allegedly 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.  Hence, Techsmart was a particularly appealing option to those service members with 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 it 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.

“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,” says John Sours, Administrator of the Governor’s Office of Consumer Protection.  “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.”

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Shawn Conroy
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