AG Obtains Settlement For Victimized Military Members, Vets

AG Paxton Obtains $13.2 Million in Relief for Texans in Multistate Settlement with Retailer Who Victimized Military Members and Vets 

AUSTIN – Attorney General Ken Paxton today announced that Texas, 48 other states and the District of Columbia reached a settlement with USA Discounters to resolve the states’ claims of deceptive trade practices against the company. In its marketing, USA Discounters promised to provide credit to all military members, veterans and government employees for purchases of consumer goods from the retailer.

The states’ attorneys general alleged that USA Discounters sold overpriced household goods at high interest rates through advertising that misrepresented offers and omitted key information about financing terms. The company was also accused of engaging in abusive collection tactics on consumer debts, which led to some consumers losing their military security clearances or being demoted in rank.

The approximate value of the restitution to consumers in Texas is more than $13.2 million. The settlement is expected to benefit nearly 9,000 Texans.

In the settlement, USA Discounters, which also conducted business as USA Living and Fletcher’s Jewelers, agreed to provide relief to certain former and current consumers. The nationwide total estimated value to consumers for restitution is approximately $95.9 million, primarily benefiting active and veteran service members. USA Discounters has agreed to:

• Write off all accounts with balances for consumers whose last contract was dated June 1, 2012 or earlier, and correct the negative comment from the company on those consumers’ credit reports (Approximately $71 million);
• Apply a $100 credit to all accounts whose contracts were dated after June 1, 2012, which were not discharged in bankruptcy, and correct the negative comment from the company on those consumers’ credit reports (Approximately $2.89 million);
• Write off all judgments not obtained in the correct state, and correct the negative comment from the company on those consumers’ credit reports (Approximately $21.2 million);
• Credit all judgments that were obtained in the correct state against members of the military with a credit equal to 50 percent of the original judgment amount (Approximately $728,000); and
• Pay a penalty of $40 million to the states. This $40 million penalty will be subordinated to all secured, administrative, priority, and unsecured claims that are allowed in the bankruptcy case.

USA Discounters closed its stores in the summer of 2015 before later declaring bankruptcy.

To view a copy of the order, click here: https://www.texasattorneygeneral.gov/files/epress/Order_Approving_Settlement.pdf?cachebuster:21

To view a copy of the settlement proposal, click here: https://www.texasattorneygeneral.gov/files/epress/Proposed_Order_Setlement_Agreement.pdf?cachebuster:91