Retailer must forgive debt, offer refunds to some military customers

Posted December 18, 2014

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— More than 300 customers in North Carolina will get debt forgiven or refunds on purchases made at a furniture retailer that Attorney General Roy Cooper accuses of unfair practices, his office said Thursday.

Cooper joined the Virginia Attorney General’s Office and the Consumer Financial Protection Bureau in filing a complaint and judgment in federal court against Freedom Furniture, Inc., Freedom Acceptance Corporation (FAC), Military Credit Services, LLC (MCS) and owners John F. Melley and Leonard B. Melley, Jr. for violations of state and federal laws on credit and debt collection.

Freedom Furniture & Electronics has 14 locations nationwide, including one in Fayetteville on Yadkin Road. FAC and MCS offer credit and collect on debts for purchases at Freedom Furniture stores.

“Military servicemembers work hard to protect our country, but unfortunately their steady paychecks can make them targets for shady practices,” Cooper said. “We won’t tolerate unscrupulous businesses that take advantage of military consumers in North Carolina.”

The judgment requires that the three companies pay more than $2.5 million in debt forgiveness and refunds and an additional $100,000 in fines.

The North Carolina customers will share $234,000 in refunds and debt forgiveness.

Freedom Furniture is not the only Fayetteville retailer drawing complaints. In November, WRAL Investigates reported on a company called USA Living (formerly called USA Discounters) which advertised easy credit and automated payment plans to members of the military, then sued those that couldn't pay.


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  • babylaceycarpenter Dec 19, 2014

    Buy it, pay for it. If you are not smart enough to add bills together to make sure you aren't sending out more than you bring in, then you shouldn't be away from your nest just yet.

  • Arthur Raleigh Dec 18, 2014
    user avatar

    Thanks Mr Cooper! I hope you are our next Governor!

  • Steve Faulkner Dec 18, 2014
    user avatar

    When is this going to happen to Rent-a-center, Aarons, etc? Guess nobody cares about them since they don't 'prey' primarily on military members.

  • TheCape Dec 18, 2014

    View quoted thread

    I've been offered "deals" that are way up there ($40 for a phone charger that eventually fell to $8) because they assumed I was stupid or something. Insulting really.

  • ditch Dec 18, 2014

    Now they should look into Mercury Finance who changed my low interest loan to 29.9%, for no reason other than they could, in 1991. At that time their loans were also pay the interest first and then pay principle. So after two years paying on a car I still owed the same amount of principle. Great company full of ex first-sergeants and other ex-military people.

  • ditch Dec 18, 2014

    I bought a tv from this place when I was 18 and just in the military. I don't remember the exacts on it but in the end I paid somewhere around 1500 for a TV that I saw in another store for 300. I was young and dumb, but to be honest this place and other places in and around Fayetteville taught me real quick not to buy anything that offered "Military" financing.

  • Corey Lipscomb Dec 18, 2014
    user avatar

    This story is lacking in a lot of detail, but as a military dependent and most recently a veteren, I've witnessed how some of these businesses provide extremely vague and misleading terms of agreements that a typical 18-20 service member wouldn't understand. I don't agree these businesses prey solely on military members, but I believe the DoD should do a better job advising those fresh out of boot camp or returning back from deployment to avoid these types of businesses, and provide proper and real life curriculum aimed at addressing predatory lending practices that are common among these types of establishments. This isn't just limited to Freedom Furniture Stores, but should also include the shady over night car dealerships found a few miles from the main gates of the base, pawn shops, etc.

  • SirWired Dec 18, 2014

    I love the typical FTC settlement... the defendants are enjoined from violating the law in the future. Really? And they weren't enjoined from violating it before? All they have to do is give up ill-gotten gains? (And they get to stay in business!) If I'm a potential crook, this tells me that even on the off-chance I get caught violating the law, I don't really lose anything at all. (And there are countless offenders that never get caught.)

  • billis Dec 18, 2014

    This story is seriously lacking in detail. Maybe that is intentional. What did they do to break the law? Did they charge interest rates outside what is lawful? Did they harass their customers? I am growing tired of stories on that lack basic information.

  • simplylindsey2010 Dec 18, 2014

    No diasagrees that we are responsible for our bills, but the terms of the contract were misrepresented and the credit rates violated state usery laws. When your business model is built upon taking advantage of people without financial sopistication you may be operating legal but you certainly are not moral. But sometimes these wonderful business people hoist themselves upon their own petard, and their judicial reqard can be satisfying.