Well, here is a clever new business strategy: Offer service members around the country and around the world financing for their appliances, furniture, and electronics, and then, when they fall behind on their loans, sue them in courts they can't get to to represent themselves.
Turns out: effective! Also: legal.
These are the conclusions of a new report jointly published by ProPublica and The Washington Post that looks at the financial "innovation" of USA Discounters and two other companies, Freedom Furniture and Electronics and Military Credit Services, that sell goods to service members on credit and then, if they fall behind, go after them in Virginia courts, regardless of where the service members are based. Together the three companies have filed 35,000 lawsuits in a little under a decade.
As Paul Kiel of ProPublica explains:
The federal Servicemembers Civil Relief Act, or SCRA, was designed to give active-duty members of the armed forces every opportunity to defend themselves against lawsuits. But the law has a loophole; it doesn't address where plaintiffs can sue. That's allowed USA Discounters to sue out-of-state borrowers in Virginia, where companies can file suit as long as some aspect of the business was transacted in the state.
For service members who don't appear in Virginia, a lawyer is appointed on their behalf. "But," Kiel writes, "the law does not specify what that lawyer must do." ProPublica found that in each of the 11 cases it examined, the same lawyer was selected as the defendant's representative, and he seems to have made minimal efforts on his clients' behalf. USA Discounters denied any "business relationship" with the attorney.