The Ultimate Blue Falcon?
A little mentioned news story in Stars and Stripes tells the tales of woe of a number of less than brilliant service members who were “duped” into buying things at they neither needed nor wanted at grossly inflated prices with the promise of “easy credit”:
Army Spc. Angel Aguirre needed a washer and dryer.
Money was tight, and neither Aguirre, 21, nor his wife had much credit history as they settled into life at Fort Carson in Colorado in 2010.
That’s when he saw an ad for USA Discounters, guaranteeing loan approval for servicemembers. In military newspapers and magazines, on the radio, and on TV, the Virginia-based company’s ads shout, “NO CREDIT? NEED CREDIT? NO PROBLEM!” The store was only a few miles from Fort Carson.
“We ended up getting a computer, a TV, a ring, and a washer and dryer,” Aguirre said. “The only thing I really wanted was a washer and dryer.”
Aguirre later learned that USA Discounters’ easy lending has a flip side. Should customers fall behind, the company transforms into an efficient collection operation. And this part of its business takes place not where customers bought their appliances, but in two local courthouses just a short drive from the company’s Virginia Beach headquarters.
From there, USA Discounters files lawsuits against servicemembers based anywhere in the world, no matter how much inconvenience or expense they would incur to attend a Virginia court date. Since 2006, the company has filed more than 13,470 suits and almost always wins, records show.
The article goes on to state that they are by far the largest recipient of default judgments against servicemembers:
As of January 2014, 230 servicemembers were involuntarily paying USA Discounters a portion of their pay, Department of Defense data shows. Altogether, those servicemembers have paid more than $1.4 million to the company.
Next on the list of most active creditors were the two other local companies, Military Credit Services and Freedom, which together had seized the pay of 92 servicemembers for a total of $289,000 as of January, according to the data.
The company did make a statement for the original story:
Timothy Dorsey, vice president of USA Discounters, said the company provides credit to servicemembers who would not otherwise qualify and sues only after other attempts to resolve debts have failed.
As for the company’s choice of court, he said it was “for the customer’s benefit.” In Virginia, the company isn’t required to use a lawyer to file suit. USA Discounters’ savings on legal fees are passed on to the customer, he said.
Now if you’re wondering if that name rings a bell, you’re not alone. Jonn and Hondo reported on Mr. Dorsey here and here.
Yeah. THAT Timothy Dorsey. And he also serves as general counsel, which is to say, the legal face of USA Discounters. Normally, I’m not all that sympathetic to young troops who do stupid things like buy things they can’t afford on credit terms that are less than favorable, particularly when they, you, I, and everyone else who has put on a uniform, has attended seemingly endless lectures on the pitfalls of “easy credit” and the eagerness with which businesses near any major military base exist solely to separate said dumbasses from their pay. Even 30 years after the fact, I can still picture the 22nd Street entrance of NTC Great Lakes, with all their shiny baubles and toys, well out of my reach but for a signature on an allotment form for a mere 30-40 percent interest.
But something about this just burns my ass. Here’s a guy who once wore the uniform of our service, who, while having a less than stellar career as a pilot, was still nominated for flag rank until enough voices were raised to eventually shoot his star down like he did the manned Air Force F-4 so many years ago.
And yet he makes a damn good living off ripping off people in uniform.
Oh, make no mistake–he serves as the good face of a company “serving the military community.” From a Stripes LTTE:
The ProPublica article referencing USA Discounters that posted to stripes.com on July 24 (“‘They’re basically ruthless’: The discount store that sues servicemembers worldwide”) and its accompanying piece, “For lenders, gaps in federal law make suing servicemembers easy,” inaccurately portray the practices and policies of our company and our dealings with military customers.
It is against the law for USA Discounters to discuss the cases of individuals who purchased items from us on credit and defaulted on their payments. Prior to publication, the company asked the reporter to obtain permission from the customers referenced to allow us to release those details — which would have told a very different story than the one reported. The reporter was unable to obtain that permission.
It is irresponsible to report on allegations of this nature, knowing that there is another side to the story and knowing that the subject of the allegations is legally barred from telling it.
USA Discounters is proud of our long and important relationship with the military community. The company has always held that the men and women who serve and sacrifice for our country should be treated with the honor and respect they deserve. And we consistently work to meet that standard.
Izzat so, Timmy? You were quoted for the story. You had an opportunity to give your side, or to explain that because of legal issues, you couldn’t comment specifically. How many of those other 230 members would you want quoted? How many of your other current and former customers would you REALLY want to give a review of your business?
Your own employees state that they are NOT to sell a product, but a credit plan. To most people, your plans suck. But you don’t exist to cater to them. Your function is, as I stated earlier, is to separate as much money from as many gullible junior servicemembers as you can with overly inflated prices on crap products with useless warranties and credit plans that would make a loanshark blush in embarrassment.
So really, Mr. Dorsey–are you providing a service, or just servicing?
Category: Dumbass Bullshit, Military issues
This story compels me to drive to VB down the NJTP to Route 13 to 1 back on to 13 again, enjoying the Bridge Tunnel, while contemplating what my purchase, lack of payment, default and subsequest court battle might look like.
Now considering my experience and friends … I just might.
I could and now will bring some heat on these vendors.
The same vendors I and all CMC’s have warned about for years!
Ta Ta.
Calling all CPO’s … Pass the word!
Master Chief,
Back in the mid 2000’s I had A/D friends that were in need of help after getting involved in financial disasters with some very predative payday loan companies. USA Discounters also popped up on the radar along the way but, due to the amount of research involved with the other, USA fell by the wayside. I will have look through boxes but I believe that I kept the notebooks from then. Some of that info might be of good use for your endeavor. We can arrange commo if you like and give Jonn my phone number, if he doesn’t have it already.
…Oh, THIS story needs to be shouted to the heavens.
Mike
Simple solution. Every little rip-off shack outside of every military instalation that is affiliated with USA discounters should be placed off-limits by the base commander.
All personel on base should be informed and anyone caught there should be taken in by PMO.
Of course there would be no punitive or administrative action against them other then their 1st Sgt telling them they were just saved from a butt-fucking.
Sounds reasonable to me. But then again when was the last time ypu saw the current crop at the Big 5 side do something reasonable? Tatoo policy? Giving pink slips to people while they are still down range? Just saying.
Back in the late 80’s, Oceanside, CA had a lot of places like this. It has cleaned up a bit, but I remember Marines who lived in the barracks getting ripped off from companies like this one. I remember car dealerships whose signs out front read “Financing for E-1 and all ranks – just bring in your LES”. I lost count of how many financial problems we had to intervene in.
When I passed through Benning a while ago, a couple of rip-off stores (or at least car dealers) were on the off-limits list (together with the Traffic Light Inn and the Boom Boom Room)…but there is an extra problem with that: businesses can litigate to have the bar removed…so the “simple” solution could tangle the commander and his department up in court. And that’s not where most commanders, or most sensible human beings for that matter, want to be.
They might well win the litigation…if they could show their good cause solidly…but they’d need more than simple anger at Dorsey and his company.
Interesting that law firm cites DoDD 3025.18 regarding off-limits areas on their website implying it to be applicable, Alberich. That DoDD doesn’t seem to have much to do with the subject. It’s titled “Defense Support of Civil Authorities (DSCA)” and doesn’t seem to even mention anything about placing off-post commercial establishments off-limits to military personnel. Rather, it appears to be geared towards how DoD would support state/local governments in times of emergency, and how state/local governments would request same.
AR 190-24 (which is also OPNAVINST 1620.2A/AFI 31-213/MCO 1620.2D/COMDTINST 1620.1E), dated 27 July 2006, appears to be a more correct reference.
Thanks for the information! I don’t have in-depth knowledge of this kind of litigation (or time to read more about it right now). You may very well be right.
Well, all he has to do is piss off the wrong customer, and he’ll get his right back, big time.
Gee, he’d fit right into the bodaprez administration, wouldn’t he? No ethics at all. Yeah, he’d be great as a front man. I’ll bet he’s really good at lying his ass off.
Remember, this was a guy who was recommended by former SECDEF Panetta for his star until such a stink was raised it was rejected and sent back, and hasn’t been renominated.
Not exactly, NHSparky. Pannetta didn’t have the whole story when he recommend this jerk to the POTUS. And the story is a whole lot worse than I’d generally think possible. Here’s the short version, assuming it’s in fact the same guy.
In 1987, Dorsey was a junior Naval Aviator. During a training exercise in the Med, he was cleared to fire at an “aggressor” – actually a USAF F4 playing the aggressor role. Dorsey indeed engaged – with live ordnance, irrespective of the fact that he knew it was an exercise. He splashed the USAF aircraft.
Dorsey later steadfastly maintained he’d “only been following the ROE” (or words to that effect). He never acknowledged any blame for the incident.
Dorsey apparently was pitched out of Naval aviation. However, he managed not to get “show caused” and eliminated. After he left active duty, he stayed in the USNR, and transferred to Naval intel.
He eventually made LCDR, CDR, and CAPT in the USNR, then was nominated for a USNR FO billet. When his nomination was sent to Pannetta, somehow the derog info about the shootdown incident (it was in his file) didn’t make it to the SECDEF’s office along with the nomination. Since there was no derog, Pannetta recommended his nomination to the POTUS, who then nominated him for RDML.
If you’re wondering how all of that happened, it also turns out Dorsey’s dad was an Admiral. The phrase “good old boy network” comes to mind.
Thankfully, a number of people knew the story and made a stink to the press about what was going on when Dorsey was nominated for RDML. The resulting furor caused DoD to pull his nomination. I’m guessing he’s now retired from the USNR.
But apparently he still has no shame – and apparently also has no qualms about screwing naive people over, either. “Ultimate Blue Falcon” is IMO quite apropos.
There are a LOT of articles about the 1987 event. Of them, I found this one informative as the others: http://www.washingtonian.com/projects/admiral/index.html
I like his explanation of how in regards to suing your ass: we eliminate the middleman and pass the savings on to you. So many assholes, so little recognition of irony.
Wonder if he is making a profit off the lawsuit?
I never got a single briefing about avoiding easy credit places from the Army, but I knew better because my mother always kept good credit and told me about places like that.
I feel for young troops who never got that kind of advice and fall into these sorts of scams. People who do shit to make money off young service members financial naivete are absolute scum. Its even worse if they’re service members themselves.
Fuck this cocksucker and fuck Panetta for supporting him. Pieces of shit the lot of them.
I remember civilians swarming outside the PXs trying to sell muscle cards to the troops. I just laughed and told them “I’m from Detroit.” I drew five bucks a month and never took RnR, so I had my Camaro off the lot a few days after going home.
After 10 months afield, I was in the gravy. haircuts were free, kiwi was cheap and a bottle of Chevas was $4.54
“Since 2006, the company has filed more than 13,470 suits and almost always wins, records show.”
That equates to about 1680 suits filed a year, or 4 a day for the last 8 years. Im not a business man, but i would guess their business model needs an evaluation by the federal government (or state, or any lawyer that wants to sue them for a change) for unfair business practices.
You think a former military man (even if he is a jackass) would have some sympathy.
YankeeJim: you might want to read my comment above. The only place this guy finds sympathy is in any dictionary he might own.
No sympathy for the service members caught up in this. You are an adult and should know what you are signing before you put pen to paper. Too many kids today are conditioned to make mistakes like this and have someone always bail them out so they suffer no consequences.
Many years ago I got caught in this. I bought a TV on credit from a place outside of Bragg and had a deduction from my pay to get it. After 6 months I finally stopped to figure it out and the 19in TV was going to end up costing me over $800 with interest. I didn’t whine about it to someone. I just stopped payment on it.
Well, I read this yesterday and it pisses me off on a couple of levels. I understand these are “adults” who should know better before signing a contract.
But predatory credit companies are no different than the loan shark down the street with the exception of better clothing and a business license.
Just because something is legal in this country hardly ever translates into it’s also ethical. Is it ethical to claim that you “stand behind” the men and women of the nation in offering your product, only for the soldier to find out that you mean you stand behind them to better pick their pocket?
Preying on the more vulnerable members, when being fronted by a former ass wipe of an officer your company sucks and everyone associated with it sucks.
Dorsey was and remains a giant steaming shit bag of a human with zero moral character, it’s not surprising that USA Discounters is a rat bastard shitbag company that preys on vulnerable troops. Instead of worrying about whether or not the latest transgendered traitor is being treated fairly, perhaps our legislators could engage in some legislative activity that would put shitbags like this out of business tomorrow and permanently.
Of course that would require our congress to actually do some good work and not just some more facade work for bullshit laws.
USA DISCOUNTERS SUCKS! DORSEY SUCKS!
Repeat loudly and often until these kids understand the truth of it.
As a general proposition, you can’t save people from themselves. If a soldier who is old enough to enter into a contract obtains merchandise on credit and doesn’t make payments as agreed, oh well. Welcome to the world. And if a soldier is so foolish as to purchase more items on credit than he originally meant to use the credit for, oh well. Welcome to the world. The named aggrieved customer in the story bought a TV, a ring and a computer but wanted only a washer and dryer. Huh? Every purchase meant more forms to sign and date and each purchase on credit meant a new promise to pay. I’m sorry that he fell for the sales come-ons or, after he saw how easy it was to get stuff, he just got more, but that was his choice. The consequences are his. See? I am truly a heartless SOB.
I had a credit company/retail store call me when I was a platoon sergeant because one of my dipshits filled out a credit application and gave them my name. I told them he was a PFC, was married and could not afford their terms and would default. They thanked me kindly and sold the kid a boat load of electronics and furniture anyway. About a month after making this transaction of goods and services, my little unicorn went UA and eventually was declared a deserter. Needless to say, he defaulted on the loan company/retail store (he did take all of that nice stuff with him when he left). They started sending me monthly statements telling me he owed them money. I used them as wall paper in my cubicle until my 1stSgt told me to stop doing it.
Gotta agree. Used to see it all the time, especially with the Bonus Babies – blow the bonus on stupid shit instead of paying off the bills. Then get chaptered for indebtedness and wonder wtf. But there are a lot of places that’ll screw the soldier that are run by former SMs. They know they can call the CO or 1SG and get their money. It don’t work like that out here in civvie life.
No argument that the business model is legal, 2/17 Air Cav. And no – in a free society, it is indeed impossible to protect people against themselves in all cases.
However, “legal” is not always equivalent to “ethical”, “moral”, “fair”, or “just”. As a lawyer, I’m certain you’ve seen many examples of that.
At some point, unethical but legal behavior becomes little more than a lawful con game when perpetrated on the naive. IMO, the proper remedy for such legal con games is spotlight publicity. It both highlights the perpetrator’s grossly unethical behavior as well as educates the public.
Kinda like the article above, actually.
I’m not sure where the legal/ethical issue arose. My point is that the guy wearing the big boy pants made an agreement and there are consequences to his not keeping that agreement. He also made choices about what to buy on credit and I refuse to jump on the bandwagon of victimization. He screwed up, as I see it. Okay, maybe he learns that being offered something such as easy credit doesn’t mean he has to or should accept the offer. Or maybe he learns that he is a victim as he is being portrayed and he bears little or no responsibility for his actions.
Well, a couple of other predatory finance companies just got popped, one can only hope these assholes at USA DISCOUNTERS (who suck by the way) are next on the list to be assessed penalties and forced to cease and desist.
Rome Finance (Colfax Capital and Culver Capital) agreed to stop collections on $92 million owed by 17,000 consumers, notify credit reporting bureaus the debts were paid and pay a $1 million penalty, among other actions. In addition, the owners are permanently banned from consumer lending, CFPB said.
If your business model is a rat bastard, albeit legal, interpretation of the law, you can still get shit hammered by the government.
http://www.stripes.com/servicemembers-get-debt-relief-after-consumer-bureau-cites-predatory-lender-1.295801
Yeah, these vultures are everywhere. Bragg Blvd, Victory Drive, Tillicum (yes, that’s a real place, right outside the gate of Ft Lewis.)
Are the troops dumb to sign the contract? Yes, of course they are. But that doesn’t mean these vultures AREN’T the scum of the earth.
Somebody tell me if I’m wrong here but my understanding was that back in the draft-era days, Private/Seaman/Airman Joe Snuffy couldn’t just sign a contract like this, it had to be approved by his commander or 1sg. Is that right? I came in during the all-volunteer era so it was a free-for-all come payday.
For those who say “tough shit, Joe signed a contract, now he’ll learn a lesson” that’s all well and good, until Joe misses morning formation because he is working a 2nd job to pay his debts, or until Joe reads the wrong coordinate off a map because he’s preoccupied with the collection agents breathing down his neck and drops a mortar round into the parking lot instead of down range. That’s how this kind of indebtedness can become a readiness issue.
I think there are ways this could be addressed but it would most likely take an act of congress (literally.) Possibly modify the Soldiers and Sailors Civil Relief Act so that any action against a service member to collect a debt from one of these companies can’t be pursued until 6 months after the soldier leaves the military. The companies would dry up and blow away or seek another vulnerable clientele.
Spot on, Martinjmpr. I can’t tell you how many phone calls I answered or were forwarded to me from young spouses of young Marines who fell prey to these “businesses”.
Lots of stories in those.
I’ve always thought that these things were part of the growing up process. Some learn through their parents before joining, but some need to learn after joining up.
Some of those that need the learning get it right outside their post in CONUS, some get it by marrying a hooker while on float.
Personal finance is just one of those additional responsibilities a good leader teaches his people, as well as protecting them from dependasaurauses with 3 kids stalking them at the mall.
Whenever a finance company called about one of my troops I quickly informed them that they were breaking California State Law by harrassing them at their place of work and disclosing personal financial information to a third party.
I live in Virginia Beach and have for 25+ years. I also am a retired CPO. I have watched the growth of USA Discounters and know several of it current and past employees. They have several retired USN enlisted and officers that are employed by them. One of the employees is a retired force CMC. Paul Kiel’s article was extensively researched with allot of info to think about. On the surface it has made USA Discounters look bad. Everyone is quick to “tar and feather” USA Discounters because of the article. The company has done allot for the military community. It has sponsored over 50 headline “free” concerts often on or near military bases. It sponsors Sailor/Soldier of the Quarter/Year around dozens of military bases around the country. It sponsors and supports dozens of military wives organizations. It sponsors dozens of MWR events. It sponsors air shows and military base children’s sports teams. It has quietly given military families that have lost all of their possessions entire households of furniture and furnishings. It supports the USO with furniture computers at no cost.
Those that think this is a predatory company is wrong. The problem is very few persons understand the target market that USA Discounters services. The sub-prime market is a tough market to be in as USA Discounters has charge off rate far above traditional companies as they do business with those that have had past credit problems. USA Discounters could not fly under the radar for 21 years if it truly was a predatory company. It has given back hundreds of thousands of dollars in sponsorships over the years to military organizations. The company should toot their horn more on the positive things it has done.
Well, every Thanksgiving, Marion Barry sponsors a food drive to give Thanksgiving meals to residents of his ward in Washington DC, but he is still a drug abusing, tax evading corrupt piece of shit. And I am sure that with a little bit of effort, you can find at least one major drug in every city that throws a few bucks towards a youth center or food pantry, but that does not wipe away all of the damage that he is responsible for regarding wrecked lives and destroyed communities. The Mafia doesn’t even have the balls to charge this kind of interest.
Comparing USAD to Marion Barry is a poor example!
Max interest rate for USA Discounters is 0% to a high of 23.99%. If you check interest rates for Sears, K-Mart their rate is higher:
This is copied directly from Sears…
Sears cards:
As of 8/4/2014, APR for purchases: Variable 7.24% – 27.24% or non-variable 14.00% – 29.99%. Minimum interest charge: up to $2. See card agreement for details, including the APRs and fees applicable to you. Sears cards are issued by Citibank, N.A.
http://www.sears.com/shc/s/DZExclusion?collateralId=1674922&EXCLID=3&adCell=A3&storeId=10153