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Ex-retailer accused of bilking military settles suit for $800K

October 3, 2016

Indiana consumers, particularly military personnel and veterans, will be receiving nearly $800,000 in restitution after former retailer USA Discounters reached a multi-state settlement for allegations of misleading consumers through deception sales practices.

USA Discounters, which also did business under the names USA Living and Fletcher’s Jewelers, was accused of targeting members of the military and veterans and selling them consumer goods on credit. The retailer’s advertisements said military veterans and government employees would not be denied credit for goods purchased through USA Discounters.

The company was also accused of selling overpriced household goods at high interest rates. The sale of those items was often done through the military allotment system, which guaranteed payment to USA Discounters. The illegal business practices occurred through misrepresentations of the loan’s origination and during the collection process.

As a result of USA Discounters’ actions, some service members lost their security clearances and faced demotions, the Indiana Attorney General’s office said.

After multiple states, including Indiana, which was represented by Attorney General Greg Zoeller’s office, filed suit, the retailer agreed to a settlement to provide relief to certain former and current customers across the country, including a total of $797,129.80 to Indiana active and veteran service members and other customers.

The settlement requires USA Discounters to:

•    Write off all accounts and balances for customers with contracts on or before June 1, 2012 and correct negative comments on those consumers’ credit reports;
•    Apply a $100 credit to all customers with contracts signed after June 1, 2012, which were not discharged when the company went bankrupt in 2015;
•    Write off all judgments not obtained in the correct state;
•    Credit all judgments obtained in the correct state against military personnel with a credit equal to 50 percent of the original judgment; and
•    Pay a penalty of $40 million to the states involved in the suit.

“Indiana consumers, including veterans and members of our military, are still living with the hardships caused by USA Discounters’ deceptive business tactics,” Zoeller said in a statement Monday. “It is our responsibility to protect public interests and sanction retailers who take advantage of consumers and the men and women who serve this country. The action taken by our office supports that important effort.”

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