Lawsuit: Company short-changing customers in cellphone buy-back program

by: Jim Strickland Updated:

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ATLANTA - Georgia regulators are working with the Federal Trade Commission to get results for cellphone users across the country.

Those consumers expected top dollar for their old cellphones, but Channel 2 consumer investigator Jim Strickland learned they got burned instead.

Court-appointed receiver Greg Hays gave Strickland the first pictures from inside the facility. The company runs several websites, including cashforiphones.com.
© 2017 Cox Media Group.

"This case is a 21st century bait and switch," said Atlanta FTC attorney Anna Burns.

Burns is one of the regulators who raided a giant warehouse in Nevada. Inside, they found bins floor to ceiling filled with cellphones and other devices.

Court-appointed receiver Greg Hays gave Strickland the first pictures from inside the facility. The company runs several websites, including cashforiphones.com.

An FTC lawsuit alleges that consumers would send phones in after being told they'd be paid hundreds of dollars.


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"When the consumer got the check back, they would get only 3 to 10 percent of the offer. So if you got a quote for $300, you get a check for $10," Burns told Strickland.

Company owner David Kruchin is suspected of acquiring phones by short-changing his clients, then selling their phones for big profits on eBay and elsewhere.
© 2017 Cox Media Group.

Malissa Marfione, of Brookhaven, complained after her quote for $200 was cut to $30 after she sent the phone in.

"I think more people should not give up, but file some complaints if you think you're taken advantage of like this," Marfione said.

Company owner David Kruchin is suspected of acquiring phones by short-changing his clients, then selling their phones for big profits on eBay and elsewhere.

When Good Morning America tried to get his side, he ran, footage of which was caught in a video that Channel 2 aired last year.

Hays is sending back old phones to their rightful owners. For those whose phones were sold, it is hoped money can be found to compensate them.