The Federal Trade Commission (FTC) is suing a smartphone resale business for allegedly cheating thousands of people out of millions of dollars.
Laptop & Desktop Repair (LDR) is a company that will pay for old or used electronics for what it advertises to be the highest price available. LDR provides an instant quote generator and customers send in their devices with the idea that they will receive the originally listed amount, according to Ars Technica.
After LDR receives the smartphone or tablet it then gives the customer a “revised quote” that is “often as little as three to ten percent of the original quote,” according to the court documents. The FTC Act “prohibits ‘unfair or deceptive acts or practices in or affecting commerce.'”
Customers were given a very short period of time, roughly three to five days, to challenge the newly proposed amount.
LDR also “avoids returning devices to consumers who wish to reject LDR’s lower revised offer, so that the Company can resell these devices for a profit,” the FTC contends.
Preliminary investigations show that LDR would purchase and then refurbish the used electronic devices and then sell it with e-commerce companies like eBay and Newegg.com.
The FTC also blames the LDR for having a business structure that rewards workers who garnered high returns with low payouts, even threatening termination of employment if margins weren’t great.
Once the FTC officially filed the suit, the federal court mandated an order freezing all of LDR’s assets and forbidding it from conducting business for the time being, Ars Technica reports.
LDR has an extensive collection of websites. All reportedly conduct business in the same way: initially offering relatively good deals for pre-owned electronics, but then rescinding or altering those valuations.
“Because of its deceptive business practices,” the official suit explains,” LDR reaps millions of dollars from consumers in this district and throughout the United States by pulling a classic ‘bait and switch’ on those who attempt to sell their devices to the Company.
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