PHOENIX — About 400 Arizona consumers will be among those collecting cash in a nationwide settlement with a retail company that allegedly abused military members and veterans with fraudulent business practices, according to the Arizona Attorney General’s Office.
In a news release Friday, Attorney General Mark Brnovich said USA Discounters agreed to payments and penalties totaling $95.9 million, with $1 million of that going to former service members in Arizona.
USA Discounters, also doing business as USA Living and Fletcher’s Jewelers, operated 24 stores nationwide, targeting current and past military personnel in the sale of furniture, appliances, phones and other goods.
Attorneys general in 49 states sued the company, alleging unfair and deceptive practices.
That included the credit sale of overpriced products with exorbitant interest rates, and use of harassing collection tactics.
USA Discounters, based in Virginia, operated many of its stores just outside military bases, and set up payment systems based on customers’ military allotments.
None of the retail outlets was in Arizona, but purported victims now reside in the state.
The company declared bankruptcy last year and closed all of its stores. The settlement was approved by a federal bankruptcy judge.
Under terms of the agreement, USA Discounters will write off balances owed by some past customers, reduce debt for others, correct negative credit ratings and pay $40 million in penalties.
Corporate representatives could not be reached for comment.
USA Discounters came under political, regulatory and media pressure after Pro Publica, an online investigative journalism outlet, exposed its business practices.
Pro Publica reported the company guaranteed credit to service members but sold items for two or three times the typical retail price.
If consumers fell behind in payments, USA Discounters allegedly sued them in Virginia — regardless of where the customers lived — and then seized their military pay.
