WRAL Investigates

'Makes me sick': Company criticized for targeting military members

Posted November 17, 2014

— Would someone pay $1,400 for a washer or dryer if they could get either at another store for half the price? What about paying $1,800 for a TV if they could save $800 somewhere else? Of course not.

Those higher prices are only part of why a nationwide retailer has the attention of federal agencies, U.S. senators and North Carolina's attorney general. It's also because of how the company does business with the military.

The Virginia-based company, USA Discounters, which just changed its name to USA Living, has two locations in North Carolina – in Fayetteville near Ft. Bragg and in Jacksonville near Camp Lejeune.. The company has locations in military towns across the country.

Many question the way the company does business with military members who have little financial know-how – from sales to pricing to aggressive debt collection.

Chris Trill is just one example. He fought on the front lines in Afghanistan and Iraq. Now, the former Fort Bragg staff sergeant is waging a financial battle here at home. The reason? A sofa set, chair, TV and stand he bought from USA Discounters on Bragg Boulevard in Fayetteville – purchases he also financed through the company.

“They say, ‘We cater to military families.’ You know, ‘we love the military,’” Trill said.

USA Discounters targeted the military with its patriotic vibe by posting advertisements on a Fort Bragg website and sponsoring military events. The company sells everything from furniture and TVs to jewelry and appliances and even car rims. It promises military members are “always approved for credit.”

Trill's contract included fees of $1,057 for a warranty and $828.84 for debt cancellation, which covers the debt if something happens to him. The finance charge was $2,065.47. All paid, the furniture that was priced at $5,000 would ultimately cost him $10,513.88.

Chris Kukla, with the Durham-based nonprofit Center for Responsible Lending, says he's concerned too many service members, like Trill, are being caught up in questionable business practices.

“I think it's really hard for people to understand what's going on in the transaction,” Kukla said. “I think there's a point where you have to recognize that you can make money doing this, but there's a point where you're just taking advantage of people.”

USA Discounters/USA Living makes buying easy. Payments can be automatically deducted from a service member's monthly allotment. Trill's contract states that paying by allotment is "strongly encouraged."

“You don’t have to worry about payments. You can just forget about it and let it go,” Trill said.

Trill did forget about it until he went on disability and when the allotments stopped. He couldn't afford the payments. USA Discounters offered to refinance, but Trill said he thought the terms were completely unreasonable. When they couldn't agree on terms, the company filed suit.

Court records show the lawsuits are a very common tactic. According to ProPublica, an investigative nonprofit based in New York City, USA Discounters has filed more than 13,000 lawsuits against customers since 2006, many of whom were in the military and missed payments. Contracts spelled out that all legal action will be heard in Virginia, where the company is headquartered, which is convenient for the company.

"I think it's particularly bad when you do it to the military, knowing that there are specific rules and regulations that are going to make it impossible for that person to show up in court,” Kukla said.

In many cases, they didn't show up, so USA Discounters garnisheed their pay. This past August, the Consumer Financial Protection Bureau ordered USA Discounters to refund $350,000 to service members charged a fee for legal protections they were already entitled to. Trill received that refund.

In response to WRAL Investigates' questions, USA Discounters/USA Living sent an 11-page response. The company says its new CEO, Jeff Feinberg, evaluated "every aspect of the way the company does business" and made changes starting with the name. He revamped collection policies and procedures for the military.

As for the warranty and debt cancellation fees, the company calls them "entirely voluntary." They added that legal action is "a last resort,” and despite what was in Trill's contract, they claim they never required cases to be heard in Virginia. Yet, they say contracts now let customers choose a court venue.

Regarding accusations of inflated pricing, USA Living says "the choice of where to shop will always be up to the customer.”

As for Trill, after WRAL Investigates got involved, the new CEO called Trill personally and offered a 50 percent reduction in the amount he owes the company. Trill says all he ever wanted was to pay his debt on reasonable terms and keep other service members from fighting this kind of battle.

Kukla says the problem affects everyone, not just military members. The problem, he says, is that military members with bad credit lose their security clearance, which means they can be booted from the military, and the money spent on military training goes out the door with them.

“Is this the world we fought for? I mean, is this really what you fought for?” Trill said. “Everybody's scamming everybody. Everyone's trying to dip into your pockets for a little bit extra. It absolutely makes me sick.”


This story is closed for comments.

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  • Larry Lynch Nov 25, 2014
    user avatar

    looks like Trill got off the hook for his POOR lifestyle choices-- but now he is in the real world- the civilian world where he will have to carry his own load.

  • Norman Lewis Nov 24, 2014
    user avatar

    I bet all the terms, charges, rates etc for any sale are fully explained in the paperwork. Before you buy anything, you need to price the items elsewhere. Don't claim ignorance or discrimination by a business when you should have paid attention to the terms. I am a veteran myself and never bought anything from that type of store because I knew it is for people with no or bad credit and that always means expensive. If fraud is proven, the company should be punished but the service members are the only ones responsible for what they purchase and how much they pay. Maybe more financial classes for new troops to help them identify what are good credit practices and what are questionable or negative for them to engage in.

  • Viewer Nov 21, 2014

    The Rules are changing. From the DoD news site.
    "The Department of Defense announced today a change to policy that will prohibit service members from using new allotments to purchase, lease or rent personal property effective Jan. 1, 2015."

  • Viewer Nov 21, 2014

    These soldiers are warned about this class of stores.There is an on base credit union to help them through situations. If they don't pay attention to their training? Well OK.

  • Obviousman Nov 20, 2014

    “Is this the world we fought for? I mean, is this really what you fought for?” Trill said. “Everybody's scamming everybody. Everyone's trying to dip into your pockets for a little bit extra. It absolutely makes me sick.”

    Yep! That's what you really fought for! Good Ole American Capitalism at it's finest! What this company is doing is a nit compared to the scams being pulled on the American public by companies such as Halliburton, General Dynamics et al! CAVEAT EMPTOR! "Let the buyer beware". Translated: It's your own fault SUCKER!

  • Beachin89 Nov 18, 2014

    I have witnessed this company being absolutely rude to my boyfriend. He too, is an Iraq and Afghanistan veteran and is now disabled due to combat related injuries. He was hospitalized for several months and called the company (responsible thing to do) to work out a new payment plan. They told him if he paid a certain amount now, they would change his terms and email him a new contract. He paid the amount requested and they NEVER changed his contract or emailed him. After waiting several days he followed up again and they denied speaking to him and told him his interest rate would now increase. After being in the room with him on multiple occasions, witnessing this company mind**** him repeatedly, I took the phone and simply asked, "Do you record your phone calls?" I was asked by the rep, "Who do you think you are trying to dictate this phone call!?" She then said, "I'm sending this account to legal!" IMO they are deceitful and unfair...

  • USMC Vet Nov 18, 2014

    There are many used car lots that do the same thing. We went to one in Fayetteville that promised us a loan for a $500 down payment. Then we got there, and suddenly they wanted $700, then $1200, then $2500. We walked away and contacted the AGs office about them because even their signs at the business said $500 down. The AGs office contacted them three times for comments, and when they never responded to the AG, the AG just dropped the matter instead of going after them, so why wouldn't they continue with fraudulent business practices when the highest law office in the state does nothing to stop them?
    And in Fayetteville, you know they were targeting young military members who don't know any better and don't know to walk away like we did.
    Shameful the AG didn't go after them. We even had pictures of their business signage clearly showing $500 down PERIOD - with no little star/asterisk leading to verbiage which would show further restrictions.

  • ytb781pearl Nov 18, 2014

    There have always been "we finance E-1 and up" and "bring in your LES" type businesses preying on the military. I'm glad the signs are no longer outside our bases, but the businesses still exist. I am appalled by the comments on this story. You do know most of those taken advantage of are very young, often 100s to 1000s of miles away from home and family, and have little to no guidance on major purchases? Oh, and they are protecting you.

  • Mr. Middle of the Road Nov 18, 2014

    Every base I was stationed at had predators outside the gates waiting for us and our paychecks. For some guys, it was the first time they had ever had disposable income, and they blew it. I understand that they did so on their own free will, and that it was their mistake. But it doesn't mean I have to have any respect for those who took advantage of them, or those on this forum who support the slime. Our service people protect us, don't we have a duty to protect them?

  • ok_then Nov 18, 2014

    Oh my! I am soooo glad to see you guys think the same as I do... Yes.. please pay your bills.. if you sign something awful.. YOU SIGNED IT!! Now, learn from your mistakes, and pay up.