As we discussed here, regulators have been keeping close watch on USA Discounters.  Today, the CFPB announced that it has “ordered the company to refund $350,000 to service members tricked into paying fees for benefits available for free.”  Last week, several senators wrote a letter urging the CFPB to investigate the findings of a report indicating that certain retailers, including USA Discounters, have undertaken aggressive debt collection actions against active duty service members

“ without affording them, arguably, any real opportunity to defend themselves.”

The CFPB acted swiftly to investigate and penalize USA Discounters for their actions.  The investigation found that USA Discounters harmed service members with unfair and deceptive practices including: (i) deceptively marketing its own legal obligation as a service to service members, (ii) misleading service members into believing that they would have an independent representative to advance their interests, and (iii) failing to provide actual services to struggling borrowers as promised in their contracts.  The CFPB’s consent order requires USA Discounters to pay more than $350,000 in refunds for service members harmed by the scam, as well as a $50,000 civil penalty.