Other LanguagesFreedom Stores accused of contacting unit commanders, filing out-of-state lawsuits
SEATTLE — Attorney General Bob Ferguson today announced a $63,000 resolution of an investigation into alleged unfair debt collection practices and deceptive advertising by retailer Freedom Stores, Inc. The alleged violations included filing lawsuits against Washington military service members in Virginia without their knowledge and contacting commanding officers with details of a service member’s debt.
The Virginia company, which closed its only Washington store in August, sold furniture, electronics, jewelry and other goods primarily to military service members.
Freedom Stores, also doing business as Freedom Furniture and Electronics, Military Credit Services and Freedom Acceptance Corporation, agreed to $25,000 in suspended civil penalties and to pay $38,000 in costs and fees to resolve allegations it violated the Washington Consumer Protection Act. Its Washington store was located in Lakewood, near Joint Base Lewis-McChord.
Freedom Stores promoted “guaranteed credit” to service members and their families through the use of terms like “Nobody’s refused credit” and “Credit options available for everyone” despite the fact that such approvals often required a down payment in excess of 50 percent.
A variety of violations were also alleged regarding the company’s debt-collection practices under the names Military Credit Services and Freedom Acceptance, including:
- Contacting Washington service members’ units and/or commanders to disclose the details surrounding the service member’s debt;
- Filing lawsuits against Washington service members in Virginia, despite the fact the service members were not stationed in Virginia and in many cases were unaware lawsuits had been filed, leading to default judgments; and
- Formally promoting military allotments — automatic payments withheld from military pay — as the “recommended payment method for active duty military” for a period of six months after the Department of Defense prohibited the use of allotments to pay for consumer goods.
Freedom Stores is accused of using baseless and deceptive price references in its advertisements, using false “Why Pay” or other manufacturer-suggested retail price, or MSRP, references. In fact, the item(s) advertised were never actually sold for the greater amount.
Ads targeted at Washington service members also included promises of military discounts, which in practice only applied to a narrow selection of discontinued items. The same ads also promoted goods for sale at “below cost,” meaning less than the retailer paid to obtain it, without identifying specific items or relevant conditions.
In its direct mail advertisements, Freedom Stores often held contests and other prize offers, but failed to include disclosures required under Washington law, such as the odds of winning.
During its operation from September 2011 through August 2015, more than 90 percent of the Lakewood store’s sales were to active duty service members, veterans and military retirees.
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The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Attorney General Bob Ferguson is working hard to protect consumers and seniors against fraud, keep our communities safe, protect our environment and stand up for our veterans. Visit www.atg.wa.gov to learn more.
Contact:
Peter Lavallee, Communications Director, (360) 586-0725; PeterL@atg.wa.gov