Fee Scam That Targets Military Members Shut Down

Sure, free enterprise makes our country tick and we like it.  But we hate it when ripoff artists use “business” to target anyone, especially members of the military.  That’s why we applaud the Consumer Financial Protection Bureau (CFPB). It  shut down a fee scam that targets military members.

USA Discounters, Ltd., a company that operates a chain of retail stores near military bases, offers financing for purchases.  The CFPB says, “Discounters tricked thousands of servicemembers into paying fees for legal protections service members already had and for certain services that the company failed to provide.”

The Norfork, Virginia-based company operates retail stores across the country and sells furniture, electronics, bedding, and appliances. Most of the stores are located within a few miles of military bases.

When service members bought something on credit, USA Discounters asked them to pay a $5 fee to a company called SCRA Specialists LLC to represent them if they couldn’t pay the full bill.  Active duty service members are protected, by law,  from being harassed by creditors.

The CFPB says, “Discounters portrayed SCRA Specialists as an independent representative that would be available to receive notices of lawsuits filed by USA Discounters, inform USA Discounters of changes in the service members’ addresses, and verify service members’ military status to determine whether the service member was eligible for protection.”

But service members didn’t need the protection and those $5 fees added up. The CFPB got more than $350,000 in refunds for service members harmed by the scam.  USA Discounters will pay an additional $50,000 civil penalty.

CFPB Director Richard Cordray said,  “Targeting service members with scams disguised as legal benefits is unconscionable, and we will not allow this injustice to continue.”

 

 

 

 

 

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Barbara Nevins Taylor

As the winner of 22 Emmy Awards and a slew of journalism honors and awards, I created ConsumerMojo.com to give you the straight story about complicated stuff. Tell us what you want to know and we'll get you the answers.