MEDIA CONTACT:

Andrea Bitely
Megan Hawthorne
517-373-8060
FOR IMMEDIATE RELEASE
September 30, 2016

Schuette: Settlement with Discount Retailer Results in over

$1 Million of Relief for Michigan Vets and Consumers
USA Discounters used abusive tactics to collect consumer debts from
vets nationwide
LANSING Michigan Attorney General Bill Schuette today announced a $95.9 million
national settlement with retailer USA Discounters, which will bring over $1 million in restitution
to 437 Michigan veterans and consumers. The settlement, which included 48 other states,
resolves that, in collecting on consumer debts, USA Discounters engaged in abusive tactics,
constantly contacted service members chains-of-command, and caused some service members
to lose security clearances and face demotions.
According to the suit, USA Discounters sold overpriced household goods at high interest rates,
often using the military allotment system to guarantee payment.
This company saw an opportunity to take advantage of the hardworking men and women in our
military to make an extra buck, said Schuette. Their illegal business practices negatively
affected so many families and I am pleased that this settlement will reduce or cancel their debts
to this company.
Case Background
USA Discounters sold consumer products, including furniture, appliances, televisions,
computers, smart phones, jewelry and other consumer goods principally on credit. The company,
which also operated as USA Living and Fletchers Jewelry, 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.

The 49 state Attorneys General alleged that USA Discounters engaged in unfair, abusive, false
and deceptive acts and practices. The states also alleged that USA Discounters only filed its
lawsuits in a few Virginia jurisdictions, no matter the service members location, deployment
status, or residence. These unlawful business practices, the states claim, were secured through
misrepresentations and omissions in advertising, during the loans origination, and during the
collection process.
USA Discounters closed its stores in the summer of 2015 before later declaring bankruptcy.
Settlement Details
USA Discounters agreed to provide relief by reducing or extinguishing the debts of certain
former and current customers. The total estimated value to consumers for these restitution
measures is approximately $95.9 million, primarily benefiting active and veteran service
members. The approximate value of the restitution to consumers in Michigan is $1,116,529.
This settlement is expected to impact 437 Michigan residents.
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
(Approximately $71 million nationwide);
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 $11,500 in Michigan)
Write off all judgments not obtained in the correct state, and correct the negative comment from
the company on those consumers credit reports (Approximately $1.1 million in Michigan);
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 $16,400 in
Michigan);
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.
Notify all consumers whose accounts will be extinguished under this agreement, i.e., brought to
a zero balance. The notice will be sent to the last mail or e-mail address known to USA
Discounters. For any consumer that receives regular communications from USA Discounters,
the reduction in the consumers account balance will be notated on the next communication.
Consumers who have questions about their USA Discounters accounts may contact the company
directly at (800) 400-7291.
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