WRAL Investigates

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

USA Living has two locations in North Carolina - in Fayetteville and Jacksonville. They're in military towns across the country. Many question the way the company does business with military members.

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FAYETTEVILLE, N.C. — 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.”


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