Coalition settlement with national business targeting militaryStaff Writer | September 30, 2016
NY AG Eric T. Schneiderman announced a multistate settlement with retailer USA Discounters.
New York $1.8 million for 759 consumers
The state Attorneys General charged that USA Discounters engaged in unfair, abusive, false and deceptive acts and practices.
The deceptive practices included targeting servicemembers and hooking them into deceptively usurious loans, false advertising and illegal collection practices.
The company would also sue servicemembers out of state where they were unable to defend the action, ultimately taking default judgments against them.
The approximate value of the restitution to consumers in New York State is $1.8 million dollars and will impact approximately 759 New York consumers.
USA Discounters sold consumer products, including furniture, appliances, televisions, computers, smart phones, jewelry and other consumer goods on credit it provided. The company targeted sales to members of the military and veterans, touting that military, veterans and government employees would never be denied credit for goods purchased from the retailer.
The bad business practices further included that USA Discounters constantly contacted servicemembers’ chains-of-command and caused some servicemembers to lose security clearances and face demotions.
The states also alleged that USA Discounters only filed its lawsuits in a few Virginia jurisdictions, no matter the servicemember’s location, deployment status, or residence.
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 secured through misrepresentations and omissions in advertising, during the loan’s origination, and during the collection process.
For impacted servicemembers, the company’s practices would taint their credit and, under the Uniform Military Justice Code, jeopardize their security clearance and therefore their jobs.
USA Discounters closed its stores in the summer of 2015 before later declaring bankruptcy. ■