USA Discounters has locations near military bases nationwide, where it offers guaranteed credit to enlisted persons who may not qualify for conventional financing. The firm's debt collection practices, however, have earned it a label as unscrupulous and ruthless.
Its consumer goods often carry a significant markup, and the loans that pay for them often come with fees for options such as warranties and debt-cancellation plans. When soldiers fall behind on payments, USA Discounters uses local courts near its Virginia headquarters to sue. The federal Servicemembers Civil Relief Act (SCRA) is meant to give active-duty military personnel the chance to defend themselves against lawsuits; but a loophole has allowed USA Discounters to sue out-of-state borrowers in Virginia, as long as some aspect of the business was transacted in that state.
When soldiers based around the country -- and overseas -- fail to show in court, USA Discounters is granted a default judgement and then moves on to garnish the borrower's pay. Since 2006, it has brought nearly 13,500 lawsuits -- and won 89 percent of them. "This looks like somebody who has really, really researched the best way to get around the entire intent of the SCRA," remarked retired Air Force judge advocate and SCRA expert John Odom. Department of Defense payroll data shows that USA Discounters seizes the pay of more active-duty military than any other U.S. company.