MASSACHUSETTS VETERANS AND SERVICEMEMBERS TO RECEIVE MORE THAN $300,000 IN CONSUMER RELIEF FROM NATIONAL RETAILER FOR DECEPTIVE PRACTICESCompany Allegedly Used Deceptive Tactics to Sell Servicemembers Overpriced Products at High Interest Rates and Used Abusive Collection Practices
BOSTON – Nearly 150 Massachusetts servicemembers and veterans will receive more than $300,000 in relief from a national retailer to resolve allegations that it used unfair and deceptive practices in the sale and financing of consumer goods, Attorney General Maura Healey announced today.
AG Healey’s Office, along with 49 other state attorneys general, reached a multistate settlement with USA Discounters, also doing business as USA Living and Fletcher’s Jewelers, that requires the company to provide more than $95 million in relief to current and former customers nationwide. USA Discounters closed its stores in the summer of 2015 and later declared bankruptcy.
“Our veterans and active duty servicemembers should not be deceived into taking out high cost loans for grossly overpriced household goods, only to be preyed upon by abusive debt collection practices,” said AG Healey. “For decades, this deceptive retailer reaped huge profits by targeting servicemembers and veterans using this unfair business model and these servicemembers deserve relief from their debts.”
The multistate group investigated USA Discounters advertising, loan origination, and collection practices that targeted servicemembers, veterans and their families. The company sold consumer products, including furniture, appliances, televisions, computers, smart phones, jewelry and other consumer goods principally on credit, often using the military allotment system to guarantee payment.
They typically marketed to members of the military and veterans, advertising that these groups would never be denied credit for goods purchased from the retailer. The states allege that USA Discounters engaged in unfair and deceptive acts and practices in their sale and financing of these goods.
In collecting on consumer debts, USA Discounters allegedly engaged in abusive collection practices, constantly contacting servicemembers’ chains-of-command and causing some servicemembers to lose security clearances and face demotions.
USA Discounters also filed lawsuits to collect on its loans and allegedly only filed them in a few Virginia jurisdictions, regardless of the servicemember’s location, deployment status, or residence. Servicemembers were often unable to travel to another state to defend themselves in court while stationed at a different state military base or overseas.
Under the terms of the settlement, USA Discounters has agreed to:
· Write off all accounts with balances for customers whose last contract was dated June 1, 2012 or earlier;
· Apply a $100 credit to all accounts dated after June 1, 2012;
· Write off judgments not obtained in the correct state.
This will lead to approximately $315,000 in relief to the 144 affected Massachusetts servicemembers, veterans and other consumers.
This settlement was handled by Assistant Attorney General Lisa Dyen of AG Healey’s Consumer Protection Division and Legal Analyst Sarah Petrie.
