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USA Discounters chain under fire from NC attorney general

FAYETTEVILLE, N.C. — The state Attorney General's Office is encouraging anyone with issues from purchases with USA Discounters to file complaints.

The Virginia-based company has come under fire after a ProPublica report into allegations it uses "aggressive debt collection actions" against active-duty servicemembers. Several U.S. senators have urged federal officials to begin probes into its business practices.

In North Carolina, USA Discounters has locations in Fayetteville and Jacksonville. It has 31 locations nationwide, according to its website.

Through a spokeswoman, Timothy W. Dorsey, vice president of USA Discounters, said the company disagrees with the report by ProPublica. He did not cite any errors with the report.

According to the report published by ProPublica and The Washington Post, USA Discounters entices servicemembers by guaranteeing credit on high-priced appliances and electronics, then sues them in Virginia if they fall behind on their payments, regardless of where they made the purchase.

If servicemembers do not show up in court, USA Discounters obtains a judgment and can garnish wages.

Dorsey said USA Discounters is legally barred from releasing information about individuals who defaulted on credit payments without written permission, which he argued did not tell the complete story. The report also failed to say that going to court is a last resort, Dorsey said.

"Only after multiple attempts are made to contact delinquent customers — and multiple offers extended for payment options — is legal action pursued," he said.

Less than 1 percent of the company's military customers are subject to garnishment as a result of defaults on payments, Dorsey said.

Dorsey said USA Discounters is transparent about its policies, and its prices are clearly marked and explained so customers can make informed decisions.

USA Discounters offers financing on merchandise, such as furniture, electronics, appliances, rims and jewelry.

In North Carolina, the state Attorney General's Office is accepting complaints online or by telephone.

"Our office has concerns about this company and would welcome consumer complaints from anyone who has had trouble with them," said Noelle Talley, a spokeswoman for the Attorney General's Office. "So far, our office has received one complaint with USA Discounters."

That complaint came from a consumer at Fort Bragg, but Talley said she thinks he has since been stationed elsewhere.

Officials at Fort Bragg said they have not received any complaints about the company.

Last week, U.S. Sens. Jeanne Shaheen, D-N.H.; Tim Kaine, D-Va.; Richard Blumenthal, D-Conn.; Jack Reed, D-R.I.; and Mark Warner, D-Va.; signed a letter urging federal defense and consumer protection officials to investigate.

A second letter was issued by another group of senators demanding that the Consumer Financial Protection Bureau and Federal Trade Commission review the practices of creditors like USA Discounters. The letter urges the agencies to "issue regulations that expressly forbid" the type of venue clauses that USA Discounters uses in its contracts.

The ProPublica report reviewed Department of Defense payroll data and found that USA Discounters seizes wages of more service members than any other company in the country by a substantial margin.

To file a complaint, fill out a form online at ncdoj.gov.

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