A total of 50 State Attorneys General announce a settlement with USA Discounters, a company accused of defrauding military service members all across the country, this week.
Under the settlement, Virginia-based USA Discounters will pay $95.9 million in restitution, primarily benefiting active and veteran service members. The settlement will impact approximately 400 Arizonans who will receive $1,009,000 in restitution.
USA Discounters, also doing business as USA Living and Fletcher’s Jewelers, sold furniture, appliances, televisions, computers, smart phones, jewelry, and other consumer goods principally on credit. USA Discounters typically marketed to members of the military and veterans, advertising that military, veterans, and government employees would never be denied credit for goods purchased from the retailer. There were 24 stores located across the country. There were not any stores in Arizona, however some service members eligible for restitution have since moved to Arizona.
The Attorneys General alleged that USA Discounters engaged in unfair, abusive, false and deceptive acts and practices. These allegations involve engaging in abusive tactics while collecting on consumer debts, constantly contacting service members’ supervisors causing some service members to lose security clearances and face demotions.
In addition, the states alleged USA Discounters sold overpriced household goods at high interest rates, often using the military allotment system to guarantee payment. These unlawful business practices were allegedly secured through misrepresentations and omissions in advertising during the loan’s origination and during the collection process.
USA Discounters closed its stores in the summer of 2015 before later declaring bankruptcy.