Markets Wired

A Federal court has granted a request from the Federal Trade Commission and the State of Georgia to permanently bar the deceptive business practices of an electronics buyback company that misled consumers about the amount of money it would pay them for selling their used smartphones, tablets and other devices.  The court also ordered the company’s owner to pay more than $42 million.

In granting the request for default judgement, the court agreed with the allegations in the FTC’s complaint that Laptop & Desktop Repair, LLC and its owner Vadim Olegovich Kruchinin earned millions by promising to buy back consumers’ used electronic devices for much more money than the defendants actually provided. After consumers provided basic information on the company’s website about the type and condition of the electronic device they wanted to sell, the defendants would provide consumers with a quote for the amount a seller would receive for the device. Yet once consumers sent in their devices to the defendants, the defendants dropped their offer price to as little as 3 percent to 10 percent of the original quote.

The complaint also alleged that consumers were usually given just a few days to accept or reject the offers and had trouble contacting the company’s purchasing department to reject the offer and retrieve their devices.

Under the default judgement entered by the U.S. District Court for the Northern District of Georgia, the defendants are permanently prohibited from marketing or from promoting used electronic buy-back services and from engaging in the deceptive activities outlined in the complaint. In addition, the judge also ordered the defendants, who have done business under a variety of other names including cashforiphones.com, cashforlaptops.com, ecyclebest.com, smartphonetraders.com and sell-your-cell.com, to pay $42.4 million. A warrant has been issued by the U.S. District Court for the Northern District of Georgia for the arrest of Kruchinin, who fled the United States after the FTC and Georgia filed their initial complaint last year.

NOTE: Stipulated final orders and default judgments and orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.