Colorado Says Retailer Scams Military Families

DENVER (CN) - USA Discounters Ltd. preys on service members and their families, charging them excessive interest and inappropriate fees on credit transactions, Colorado's attorney general says.

Attorney General Cynthia Coffman sued the company, which is also known as USA Living and Fletcher's Jewelers, last week in Denver District Court.

In her complaint, Coffman says the defendants often locate their stores near large military bases, like Peterson Air Force Base and Fort Carson Army Base, both of which are in Colorado Springs and extend credit to military families. However, once the families begin to rely on that credit to make purchases, they are charged exorbitant fees and abnormally high late penalties, and offered extensions on credit accounts that have been closed.

Coffman also charges that the defendants fail to tell customers of their right to cure defaults, and engage in "unconscionable" collection practices. These include suing families who defaulted on their debts in out-of-state courts, even though those debts originated from Colorado exchanges.

The attorney general said in a written statement that such acts are violations of Colorado's consumer lending laws, and that she filed her lawsuit after the company failed to heed past warnings from her office and change its credit policies.

Coffman is seeking unspecified civil penalties and damages, and disgorgement of all the alleged ill-gotten gains so that they can be returned to consumers. She is also asking the court to permanently enjoin USA Discounters from filing lawsuits against Colorado buyers in other states.

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