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(6/27/09 by HDGURU®) The old adage “If the deal sounds too good to be true, it is” applies to purchases of HDTVs, camcorders, digital cameras and other consumer electronics on the Internet.  This week the office of the NY State Attorney General concluded a settlement agreement with seven Brooklyn based e-tailers, making them pay $665,000 to consumers they cheated, adding another $100,000 in investigation costs. “These companies engaged in the worst kinds of consumer fraud, from classic bait-and-switch schemes to blatant lies and bullying sales tactics.” said Attorney General Andrew Cuomo.

The press release adds “Under the agreements secured today by Cuomo, two of the companies, Camera Wiz and Sonic Photo, will dissolve completely.  The following five companies will completely revamp their business practices and be subject to ongoing monitoring: Best Price Camera, Foto Connection, 1 Way Photo, 86th Street Photo and Broadway Photo, LLC.  All of the companies will pay substantial monies to provide restitution for consumers who were subjected to the companies’ illegal business practices.”

How do unscrupulous retailers “bait and switch” customers?  While methods may vary from store to store, the first part of any good con is to snag the victim. Prospective buyers want the lowest price possible, and bait and switch operations offer prices that are lower than offered by legitimate dealers (often below cost).

The games begin after the order has been placed. The victim gets a phone call from a dealer sales rep who either advises switching to another, supposedly superior product, or claims the product purchased is designed for a foreign market and lacks the US warranty and English language instructions. Or the salesman will attempt to get the victim to buy upgraded or overpriced items (HDMI cables, screen cleaning kits, mounts, practically worthless extended warranties, etc.) Say “no” and the store will simply not ship the product.

If you have a problem with your main purchase, or are dissatisfied with an accessory, according to the press release, these unscrupulous companies make returning them almost impossible by requiring customers to speak to a live representative during limited business hours and then refusing to answer those calls.

The press release adds “all the fined companies obtained fake ‘consumer testimonials’ through websites that claim to be impartial consumer based ‘rating’ websites, but are in fact are pay-per-click-based websites filled with content provided by the websites proprietors.”. Here’s the full release (NY AG Secures Agreement With Electronics Companies Using Illegal Business Practices).

The Complete List

The seven companies fined operate under over one hundred company names and websites! The HD Guru obtained the list from the NYS Attorney General’s Office, posted here (List of Bait and Switch E-tailers).

Recourse

If you believe you are a victim of illegal practices of one of the listed companies you may qualify for restitution. The NYS Attorney General appointed The New York Better Business Bureau to handle claims. They must be submitted from July 1, 2009 to December 1, 2009 by calling the NY BBB at 212-533-6200 (as of July 1).

How To Avoid A Scam E-tailer

Be wary of sellers located in Brooklyn, NY. For reasons not exactly clear this NYC borough has the highest concentration of scamming e-tailers. The state of New Jersey appears to have the second highest number of bad retailers; however there are many legitimate merchants in the Garden State.

Check out http://sheddingsomelight.com/ for a list of dealers and their business aliases having high numbers of complaints. Here you’ll also find helpful tips on how to detect scam merchants.

Go to review websites, look for the volume and severity of the bad reviews while disregarding the positive reviews because many may be self-generated by the scammers.

Check out the e-tailers’ local Better Business Bureau website for complaints and to learn if they were resolved.

Always check out return policies, restocking fees and freight charges for returns prior to a purchase. Many e-tailers have sterling reputations, so don’t allow the bad ones to inhibit your online purchasing; the HD Guru has made many satisfactory etail purchases by following his own advice!

-HDGuru® with Michael Fremer
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