Attorney General Laxalt Announces Settlement With USA Discounters

September 30, 2016

Approximately $439,000 to Return to Consumers, Veterans and Military Members

    Carson City, NV – Today, Nevada Attorney Adam Paul Laxalt announced a multistate settlement with retailer USA Discounters, also doing business as USA Living. The settlement resolves claims of deceptive trade practices against USA Discounters, a retailer that catered toward serving members of the military and veterans. In addition to Nevada, 48 states and the District of Columbia participated in the settlement. Nevada took a lead role by serving on the executive committee and helping negotiate the terms of the settlement.

      USA Discounters sold consumer products, including furniture, appliances, televisions, computers, smart phones, jewelry and other consumer goods principally on credit. USA Discounters typically marketed to members of the military and veterans, advertising that military, veterans and government employees would never be denied credit for goods purchased from the retailer.

        “Our men and women who have sacrificed so much in service to their country deserve better than to be taken advantage of by retailers looking to turn a quick profit,” said Laxalt. “This Office will make every effort to protect those being targeted by deceptive practices, and will continue to work with our investigatory partners to ensure the responsible parties are held accountable for their actions. My Office is proud to have taken a leadership role in this multistate investigation in order to negotiate a better settlement on behalf of an estimated 200 affected Nevadans, resulting in approximately $439,000 that will be returned to our consumers.”

          The States allege that USA Discounters engaged in unfair, abusive, false and deceptive acts and practices. While collecting on consumer debts, the States allege that USA Discounters engaged in abusive tactics by repeatedly contacting service members’ chains-of-command, thereby causing some service members to lose security clearances and face demotions as a result. Other allegations include that USA Discounters only filed its lawsuits in a few Virginia jurisdictions, regardless of the service members’ location, deployment status or residence. Moreover, states also allege that USA Discounters sold overpriced household goods at high interest rates, often using the military allotment system to guarantee payment. Lastly, states claim that these unlawful business practices were secured through misrepresentations and omissions in advertising, during the loan’s origination and during the collection process.

            USA Discounters closed its stores in the summer of 2015 before later declaring bankruptcy. Under the terms of the settlement, USA Discounters agreed to provide relief to certain current and former customers. The total estimated value to consumers for these restitution measures is approximately $95.9 million, primarily benefiting active and veteran service members. USA Discounters agreed to:

              • Write off all accounts with balances for customers whose last contract was dated June 1, 2012 or earlier, and correct the negative comment from the company on those consumers’ credit reports (saving consumers approximately $71 million);

                • Apply a $100 credit to all accounts whose contracts were dated after June 1, 2012 that were not discharged in bankruptcy, and correct the negative comment from the company on those consumers’ credit reports (saving consumers 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 (saving consumers 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 (saving consumers approximately $728,000);

                      In addition to Nevada, participants in the settlement include: Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

                        Chief Deputy Attorney General JoAnn Gibbs and Deputy Attorney General Laura Tucker of the Attorney General’s Bureau of Consumer Protection represented Nevada in this settlement.