Struggling Soldiers Targeted for Lawsuits in Which They Can't Defend Themselves

USA DiscountersTaking advantage of people is totally uncool. Taking advantage of people who work every day fighting for your freedom to take advantage of them is even worse. Yet that seems to be what's happening with at least three stores who sell overpriced goods to service members on credit, and then take them to court when they can't pay.

The tricky part is, thanks to a loophole in the law, stores like USA Discounters, Freedom Furniture and Electronics, and Military Credit Services, can file the suit in the Virginia courts, regardless of where the military member is stationed. So basically they have no way to defend themselves in court.

These stores lure in young service members just starting out in life with their promise not to deny credit to military personnel. What they don't tell these folks is that a lot of their products are extremely overpriced. One website reported that "an iPad Mini, for example, last year sold at USA Discounters for $699 when Apple's retail price was $329."

Another example was Army Pvt. Jeramie Mays, who bought a $650 laptop for $1,799, plus $458 in add-ons. Over the course of a two-year contract, Mays would've spent almost $3,000 on the computer!

Unfortunately, Mays' laptop broke while he was serving overseas in Iraq, and he stopped making payments. So the company sued him in Virginia, while he was still stationed abroad, where he had no way of representing himself. Here's what happened:

USA Discounters brought suit against him while he was in Germany. After winning a judgment, he said, the company sought to seize both his pay and funds in his credit union account. The action froze his account for several weeks, Mays said.

Mays, currently based at Joint Base Lewis-McChord in Washington state, said that for most of last January, he could not withdraw funds. "Trying to take care of two kids and my mother and myself on nothing doesn't help," he said. Around the same time, he finally filed for bankruptcy. His debt with USA Discounters was discharged last March, protecting any assets from seizure.

Of course these companies say they have a right to be paid, and they do. But the whole business is incredibly shady, what with the overpriced wares, the alleged pressure to buy more than they came in for, the excitement of credit approval ... it just seems like some of these people are getting set up to be screwed over.

Do you think these soldiers are being taken advantage of?


Image via Mike Kalasnik/Flickr



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nonmember avatar Elise

Yes, they are being taken advantage of because they are either ignorant or stupid. Who in the right mind would buy expensive electronics without researching it first? I bought a laptop computer yesterday, I was in the store for ten minutes because I knew what I wanted and how much it would be.

Mark Cox

of course but the troops seem to be part of the problem..if you cant pay cash then do without

nonmember avatar Gina

The fact that they target military sucks, BUT it is not the stores fault these people are not doing their homework before making such large purchases.

blunt... bluntcakes

There's actually a bunch of scum bag stores like this all around the US, even places like rent a center and la curaƧao. They target the ignorant and dumb. This happens to civilians as well. Do your research and really crunch your numbers before committing to purchase anything.

Sarah... SarahHall58

So basically what you're saying is that they give people credit, expect them to pay, then when they don't, they sue... How is this different from any other credit agency?

the4m... the4mutts

This is no different than Aaron's, Pearsey's, or any other place that is basically a "rent to own" with incredibly high interest. They just happen to be in an area where they can sue soldiers who are deployed. Maybe the soldiers should have been smarter, and done their research on prices and policies.

miche... micheledo

I think the biggest issue here is that someone can be taken to court when they are serving overseas.  That is the only problem I see.

nonmember avatar Credit Warrior

Small business owners who extend credit to the military should be worried if USA Discounters goes out of business because of investigating reporters who only report and make judgements without all of the facts. Mr Kiel's investigation seems extensive yet also very troubling as he present a skewed view. USA Discounters has been in business 23 years with the same business model. Thats a long time for a business that is now considered predatory? Doesn't add up. They have spent hundreds of thousands of dollars on military organizations. Sponsored free concerts on or near bases, airshows, military luncheons honoring military members of the quarter or year,sponsor military childrens events. USA Discounters has given the USO computers and furniture at zero cost. They sell to those that want credit but have abused credit (subprime market) in the past or have no credit history at all. USA Discounters gives credit to "subprime" customers who have the ability to pay, not on their previous credit history. USA Discounters prices are higher than prime retailers to cover the cost of collections and charged off accounts which is over 25% of accounts over any three year period. USA Discounters is an alternative to rent to own which has far costs and higher interest rates and fees for those who choose to go there. USA Discounters has not done a good job defending itself.

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