Posted on Aug 20, 2015
"Company That Sued Soldiers Closes Its Stores"
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From: Military.com
For the first time in its history, USA Discounters is living up to its name. For years, the company has specialized in selling marked-up appliances, electronics and furniture to service members through high-priced loans. But these days, it's just the place for a soldier to go for a steal on a bedroom set or a washer. The company's website used to shout "Bad Credit? Slow Credit? No Credit? No Problem!" Now it's "ENTIRE STORE ON SALE!"
The chain, which once had 24 stores, almost all right outside military bases around the country, has been holding a rolling going out of business sale. The closures follow our investigation of the company's lending practices last summer and a subsequent series of government inquiries and Department of Defense actions.
USA Discounters did not respond to our calls and emails seeking comment. Just seven of the company's two dozen stores remain open – and those are furiously selling off merchandise at discounts of "70%–95% OFF," according to the company's website.
ProPublica's investigation, which also ran in the Washington Post, detailed how the company guaranteed credit to service members for items that sometimes sold for two to three times the typical retail price. If borrowers fell far behind on their loans, USA Discounters sued them in Virginia state court, regardless of where the purchases were made. Between 2006 and last July, USA Discounters had filed more than 13,000 suits in Virginia courts —almost always winning— and seized the pay of more active-duty military than any company in the country.
Another retailer featured in the story, Freedom Furniture and Electronics, is also closing.
Following our story last year, a group of senators sent letters to federal regulators urging them to investigate USA Discounters and toughen up laws and regulations to address the lending and collection issues highlighted in the article. A spokesman for the Consumer Financial Protection Bureau (CFPB) said the agency does not comment on investigations.
The company initially reacted by issuing a press release calling ProPublica's reporting inaccurate, though it identified no errors. Later, USA Discounters announced it was changing the name of its stores to "USA Living" and reforming its collection practices. It would still sue service members in a court that might be hundreds of miles from where they are based, but customers would be clearly notified of the impending action and given the option to be sued closer to home. It was a change a consumer advocate described as "a little less bad" than before.
Then, late last year, the Defense Department announced a big change that seemed likely to dramatically change the way the company did business. As we detailed in our story, USA Discounters' military customers almost always set up payments through the military's allotment system. That ensured that with every paycheck, USA Discounters got paid first. In one letter after ProPublica's story, five senators urged the Department to accelerate an already ongoing review of the system.
The Department's new policy prevents retailers like USA Discounters from using allotments as a form of payment and eliminated "that aspect of the allotment system most prone to abuse by unscrupulous lenders that prey on our service members," as a Department press release put it.
Both USA Discounters and Freedom told us last year that the change to allotments would not have a major impact on their business.
Separately the company also entered into a settlement with the CFPB last year over a $5 fee the company charged its military customers.
The new year brought more complications. In April, USA Discounters was hit with a class action lawsuit. In July, Colorado's attorney general filed suit, calling the company's practice of filing lawsuits in Virginia against Colorado-based service members "unconscionable." North Carolina's attorney general has announced an investigation of the company, which a spokeswoman said was ongoing.
USA Discounters continued filing lawsuits against service members in Virginia courts until May of this year, but recently it has dropped almost all of its open suits against out-of-state defendants, court records show. At a court date in Virginia Beach General District Court earlier this month, 60 lawsuits were on the docket. Defendants were based at Fort Bragg, Fort Polk, Fort Benning, and Fort Hood, among other installations in states from Georgia to Washington. The company dropped all but two of the suits.
Freedom has also been under scrutiny. Last year, the company settled with the CFPB and attorneys general in Virginia and North Carolina over their debt collection practices. The company agreed to credit or refund customers $2.5 million, pay a penalty of $100,000, and stop filing lawsuits in Virginia courts against out-of-state service members. Separately, Colorado's attorney general has also sued the company.
But, in a statement, Freedom said its decision to close down had nothing to do with the change to allotments or lawsuits by regulators. Instead, it was due to increased competition from the lease-to-own industry and the fact that "the price of televisions and other consumer electronics, which make up half of our sales, has decreased significantly," said spokeswoman Elizabeth Heaton.
http://www.military.com/daily-news/2015/08/16/company-that-sued-soldiers-closes-its-stores.html
For the first time in its history, USA Discounters is living up to its name. For years, the company has specialized in selling marked-up appliances, electronics and furniture to service members through high-priced loans. But these days, it's just the place for a soldier to go for a steal on a bedroom set or a washer. The company's website used to shout "Bad Credit? Slow Credit? No Credit? No Problem!" Now it's "ENTIRE STORE ON SALE!"
The chain, which once had 24 stores, almost all right outside military bases around the country, has been holding a rolling going out of business sale. The closures follow our investigation of the company's lending practices last summer and a subsequent series of government inquiries and Department of Defense actions.
USA Discounters did not respond to our calls and emails seeking comment. Just seven of the company's two dozen stores remain open – and those are furiously selling off merchandise at discounts of "70%–95% OFF," according to the company's website.
ProPublica's investigation, which also ran in the Washington Post, detailed how the company guaranteed credit to service members for items that sometimes sold for two to three times the typical retail price. If borrowers fell far behind on their loans, USA Discounters sued them in Virginia state court, regardless of where the purchases were made. Between 2006 and last July, USA Discounters had filed more than 13,000 suits in Virginia courts —almost always winning— and seized the pay of more active-duty military than any company in the country.
Another retailer featured in the story, Freedom Furniture and Electronics, is also closing.
Following our story last year, a group of senators sent letters to federal regulators urging them to investigate USA Discounters and toughen up laws and regulations to address the lending and collection issues highlighted in the article. A spokesman for the Consumer Financial Protection Bureau (CFPB) said the agency does not comment on investigations.
The company initially reacted by issuing a press release calling ProPublica's reporting inaccurate, though it identified no errors. Later, USA Discounters announced it was changing the name of its stores to "USA Living" and reforming its collection practices. It would still sue service members in a court that might be hundreds of miles from where they are based, but customers would be clearly notified of the impending action and given the option to be sued closer to home. It was a change a consumer advocate described as "a little less bad" than before.
Then, late last year, the Defense Department announced a big change that seemed likely to dramatically change the way the company did business. As we detailed in our story, USA Discounters' military customers almost always set up payments through the military's allotment system. That ensured that with every paycheck, USA Discounters got paid first. In one letter after ProPublica's story, five senators urged the Department to accelerate an already ongoing review of the system.
The Department's new policy prevents retailers like USA Discounters from using allotments as a form of payment and eliminated "that aspect of the allotment system most prone to abuse by unscrupulous lenders that prey on our service members," as a Department press release put it.
Both USA Discounters and Freedom told us last year that the change to allotments would not have a major impact on their business.
Separately the company also entered into a settlement with the CFPB last year over a $5 fee the company charged its military customers.
The new year brought more complications. In April, USA Discounters was hit with a class action lawsuit. In July, Colorado's attorney general filed suit, calling the company's practice of filing lawsuits in Virginia against Colorado-based service members "unconscionable." North Carolina's attorney general has announced an investigation of the company, which a spokeswoman said was ongoing.
USA Discounters continued filing lawsuits against service members in Virginia courts until May of this year, but recently it has dropped almost all of its open suits against out-of-state defendants, court records show. At a court date in Virginia Beach General District Court earlier this month, 60 lawsuits were on the docket. Defendants were based at Fort Bragg, Fort Polk, Fort Benning, and Fort Hood, among other installations in states from Georgia to Washington. The company dropped all but two of the suits.
Freedom has also been under scrutiny. Last year, the company settled with the CFPB and attorneys general in Virginia and North Carolina over their debt collection practices. The company agreed to credit or refund customers $2.5 million, pay a penalty of $100,000, and stop filing lawsuits in Virginia courts against out-of-state service members. Separately, Colorado's attorney general has also sued the company.
But, in a statement, Freedom said its decision to close down had nothing to do with the change to allotments or lawsuits by regulators. Instead, it was due to increased competition from the lease-to-own industry and the fact that "the price of televisions and other consumer electronics, which make up half of our sales, has decreased significantly," said spokeswoman Elizabeth Heaton.
http://www.military.com/daily-news/2015/08/16/company-that-sued-soldiers-closes-its-stores.html
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Lawsuit
Posted >1 y ago
Responses: 19
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And just to warm your hearts, AFTER all the trouble they got into and AFTER deciding to close , file Chap 11, and AFTER they had been slapped with fines at the FED level and AFTER they had settled two multi million settlement with those suing them.....
More a group of Attorney Generals ganged up on them and won a total of 96 million dollars in settlement costs.
https://consumerist.com/2016/09/30/scammy-bankrupt-usa-discounters-to-pay-96m-for-targeting-then-suing-armed-forces-customers/
https://consumermediallc.files.wordpress.com/2016/09/usadiscounterssettlement.pdf
That ought to put a dent in their capital fro the next predatory business they planned on starting after chap 11 was done with USA Discounters, LTD, with is also USA Living and Fletcher’s Jewelers
More a group of Attorney Generals ganged up on them and won a total of 96 million dollars in settlement costs.
https://consumerist.com/2016/09/30/scammy-bankrupt-usa-discounters-to-pay-96m-for-targeting-then-suing-armed-forces-customers/
https://consumermediallc.files.wordpress.com/2016/09/usadiscounterssettlement.pdf
That ought to put a dent in their capital fro the next predatory business they planned on starting after chap 11 was done with USA Discounters, LTD, with is also USA Living and Fletcher’s Jewelers
Scammy, Bankrupt “USA Discounters” To Pay $96M For Targeting, Then Suing Armed Forces Customers
Two years ago, we told you about the not-at-all a discount retailer called USA Discounters that targeted active-duty servicemembers, and not only trapped a number of them in high-cost installment p…
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Sounds like a good time to go shopping!
Still be careful that the prices weren't all inflated before their "discounts" though. This seems to be a legitimate fire sale however.
Still be careful that the prices weren't all inflated before their "discounts" though. This seems to be a legitimate fire sale however.
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RallyPoint Shared Content
Love to see companies like this go out of business!
I understand the desire to make money, I don't understand the desire to be unethical and rip off people to do it. Organizations that lack integrity will shutdown, they can't survive their own deceit.
Love to see companies like this go out of business!
I understand the desire to make money, I don't understand the desire to be unethical and rip off people to do it. Organizations that lack integrity will shutdown, they can't survive their own deceit.
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It would be easier to put them off-limits /out of bounds .. for their unscrupulous practices.
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Well, to be fair, you know what your credit is like. You know how bad/good it is. And you know what you can and can't get. 300% interest is wonderful if you can't get credit. Its also a lesson; nothing in life is free. Hopefully the Private, Airman or Seaman will have gained some credit from the transaction and learned to be more prudent.
Cheers and applause are nice, but please...we're angry at McDonalds for making us overweight...
Cheers and applause are nice, but please...we're angry at McDonalds for making us overweight...
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SGM Erik Marquez
Its not nearly as simply as that, if it was, they would be in business still and more than 30 Attorney Generals across the US would not have worked so hard to put them out of business.
Perhaps you were born with some great insight into credit ratings, financial process, understanding the difference between a fair and legal "fee" or service and other.. But MOST have to learn ,, and it is those that are trying to learn who were prayed upon.
And it is not a high APR that was the "hook" to this predatory process .. Your confusing Pay day loans, high interest CC or in house financing with extortionate interest rates, a completely different predatory practice than discussed here today.
The loan APR was highish, but not over the top,,,it was the inflated purchase price, but, not even just that, it was the add on fees and charges hidden in the process and not disclosed or hidden in the paperwork that a new inexperienced credit buyer (other than you PO3 Donald Murphy, clearly you were never tricked in these practices)
Then on top of all that...... high retail price, add on fees and charges, high'ish interest rates, bi monthly payments done though allotments so there was less perception of "paying" all that money,,it was monopoly money... invisible, never saw it come in, never saw it spent..
On top of all that we have the defaulted loan practices they used. Third party collections that used illegal processes and tactics, and Suing the SM in the CORP HQ state, where laws are lacking protecting the debtor, and the SM had little to no chance to appear in the court they were being sued in.
This was NOT just about,,what did you say?? "300% interest ", in fact that had NOTHING to do with it at all. Not even sure why you brought it up, "300% interest " is neither a real thing, nor are outlandish interest rates of any amount part of this company fraudulent practices.
Perhaps you were born with some great insight into credit ratings, financial process, understanding the difference between a fair and legal "fee" or service and other.. But MOST have to learn ,, and it is those that are trying to learn who were prayed upon.
And it is not a high APR that was the "hook" to this predatory process .. Your confusing Pay day loans, high interest CC or in house financing with extortionate interest rates, a completely different predatory practice than discussed here today.
The loan APR was highish, but not over the top,,,it was the inflated purchase price, but, not even just that, it was the add on fees and charges hidden in the process and not disclosed or hidden in the paperwork that a new inexperienced credit buyer (other than you PO3 Donald Murphy, clearly you were never tricked in these practices)
Then on top of all that...... high retail price, add on fees and charges, high'ish interest rates, bi monthly payments done though allotments so there was less perception of "paying" all that money,,it was monopoly money... invisible, never saw it come in, never saw it spent..
On top of all that we have the defaulted loan practices they used. Third party collections that used illegal processes and tactics, and Suing the SM in the CORP HQ state, where laws are lacking protecting the debtor, and the SM had little to no chance to appear in the court they were being sued in.
This was NOT just about,,what did you say?? "300% interest ", in fact that had NOTHING to do with it at all. Not even sure why you brought it up, "300% interest " is neither a real thing, nor are outlandish interest rates of any amount part of this company fraudulent practices.
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PO3 Donald Murphy
SGM Erik Marquez - My answer was kind of vague but yeah, I was enamored by the "stuff" right outside the main gate. And being a young single sailor with tons of money in my pocket I wanted to spend it all in one weekend. Luckily, our command's policy was that your department SGM would give you a "pre-payday" talk and before I knew it, I was saving my money. There's reputable companies out there (Sears) that would sue service member's for re-negging on agreements, etc.
Yes, I fell victim to those as well. Bought my first new car in 1986 on one of those lovely "we'll take it out of your pay" agreements. They even took out insurance on me without me knowing it. Its easily done. Whats the answer? Will the death of USA be an "end to it" as we know it? Well, let me ask you an honest question: following ENRON's death, do people still lose their company pensions? I think the answer is "yes." Hell, Citi Financial got sued by me in 2008 for a ton of hidden fees/charges. So again, it is not just USA.
Yes, I fell victim to those as well. Bought my first new car in 1986 on one of those lovely "we'll take it out of your pay" agreements. They even took out insurance on me without me knowing it. Its easily done. Whats the answer? Will the death of USA be an "end to it" as we know it? Well, let me ask you an honest question: following ENRON's death, do people still lose their company pensions? I think the answer is "yes." Hell, Citi Financial got sued by me in 2008 for a ton of hidden fees/charges. So again, it is not just USA.
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SGM Erik Marquez
PO3 Donald Murphy - Thanks for that...I think your follow up is much more common than the SM that knew better than to ever get taken at least once...which is how I read your first post..., thats on me. So thanks for expanding.
I too got taken..ONCE in a pay later to play now... Combo of high retail price, highish interest rates and "Low low payments" so the loan dragged out the longest allowed by law , interest being paid the whole way of course. I had a Platoon Sergeant read me the riot act after I got into that deal, then help me see the error of my ways..... He also took $ out of his pocket and told me to go pay off the item in full NOW, then pay him back out of my next 4 paychecks.... , the best PSG I ever met, the worst 1SG I ever met
I too got taken..ONCE in a pay later to play now... Combo of high retail price, highish interest rates and "Low low payments" so the loan dragged out the longest allowed by law , interest being paid the whole way of course. I had a Platoon Sergeant read me the riot act after I got into that deal, then help me see the error of my ways..... He also took $ out of his pocket and told me to go pay off the item in full NOW, then pay him back out of my next 4 paychecks.... , the best PSG I ever met, the worst 1SG I ever met
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USA Discounters, Ltd., d/b/a USA Living and d/b/a Fletcher's Jewelers
Fletcher's Jewelers is a sister company with the same owners and same predatory lending practices ...I was about to "warn" of that but a little looking around and it seems they are closing or closed those stores as well.
I have no doubt after Chap 11 is complete, the parent company ownership predators will find a new way to take from the military members
Fletcher's Jewelers is a sister company with the same owners and same predatory lending practices ...I was about to "warn" of that but a little looking around and it seems they are closing or closed those stores as well.
I have no doubt after Chap 11 is complete, the parent company ownership predators will find a new way to take from the military members
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SGM Erik Marquez
"Is this another case of retired military screwing our military folks?"
JOE SCIAMETTA
Norfolk, VA — President for USA Discounters, Ltd.
https://www.alvarezandmarsal.com/our-people/joe-sciametta
It would appear to be a NO for this guy
FRANK MROCZKA
Virginia Beach, VA — Chief Executive Offi for USA Discounters, Ltd.
http://www.scaringilaw.com/attorneys/frank-d-mroczka-esq-/
It would appear to be a NO for this guy
Not finding Key executive members as I would normally find...https://www.bloomberg.com/research/stocks/private/people.asp?privcapId=4494727
JOE SCIAMETTA
Norfolk, VA — President for USA Discounters, Ltd.
https://www.alvarezandmarsal.com/our-people/joe-sciametta
It would appear to be a NO for this guy
FRANK MROCZKA
Virginia Beach, VA — Chief Executive Offi for USA Discounters, Ltd.
http://www.scaringilaw.com/attorneys/frank-d-mroczka-esq-/
It would appear to be a NO for this guy
Not finding Key executive members as I would normally find...https://www.bloomberg.com/research/stocks/private/people.asp?privcapId=4494727
Joseph J. Sciametta is a Managing Director with Alvarez & Marsal in New York. With more than 15 years of restructuring experience, he specializes in advising troubled companies, as well as lenders in distressed situations.
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SGM Erik Marquez
MAJ Ken Landgren "another case of retired military screwing our military "
Sir? Another case?
Do you have another case in mind? Please share? What company are you referring to?
Sir? Another case?
Do you have another case in mind? Please share? What company are you referring to?
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Becareful of those going out of business sales. The consigne market up the prices at the start of the sale to get as much as he can. The best prices are at the end when there is very little left in the stores. Then it is dirt cheap. i have worked for stores that have gone out of business. I have seen the difference of the prices on the furniture.
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