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Bait and switch: Online electronics stores caught in fraud

Seven Brooklyn-based electronics retailers operating more than 40 Web sites are fined for fraudulent practices, including bait-and-switch tactics.

Like N.Y.-area icon Crazy Eddie in the '80s, seven contemporary online merchants were caught in fraud. sybsa.org

Seven online merchants operating more than 40 Web sites have agreed to pay a $765,000 settlement following an investigation by the New York State Attorney General's office, the AG's office said.

"These companies engaged in the worst kinds of consumer fraud, from classic bait-and-switch schemes to blatant lies and bullying sales tactics," New York Attorney General Andrew Cuomo said in a news release that went out Thursday. "Let this be a message to online merchants everywhere: such abuse of consumers and violation of the law will not be tolerated."

All of the companies were based in Brooklyn, and while their names invoke digital photography, many also sell gear ranging from projectors to HDTVs and computers.

Five of the companies--Best Price Camera, Foto Connection, 1 Way Photo, 86th Street Photo, and Broadway Photo--agreed to change their business practices, according to the release, while the other two--Camera Wiz and Sonic Photo--will close. A full list (PDF) of the companies and Web sites involved in the settlement is available at HDGuru.com.

In the bait-and-switch routine employed by these merchants, the bait is prices that are significantly lower than those of other merchants. The switch occurs after the customer places the order, according to the AG's news release:

Once an order was placed, the companies would call consumers and try to sell them additional or "upgraded" merchandise at inflated prices. If the consumer refused to purchase the additional merchandise, the companies would cancel the sale or claim the item was backordered for months. If the consumer did agree to purchase the additional merchandise, the companies would send them lower-quality merchandise than what was promised, or merchandise that the consumer never ordered in the first place. When customers tried to return the items, they would either be denied or be slammed with undisclosed fees. All of the companies further limited customers' ability to return merchandise by requiring them to speak to a live customer representative during limited business hours, and then refusing to answer those telephone calls.

If you bought an item from one of the named retailers and believe you qualify for restitution, you can submit a claim to the New York State Better Business Bureau from July through December.

For more advice, check out the N.Y. Attorney General's online buying tips and the buying online section of CNET's TV Buying Guide.