Posted on 04/05/2008 10:06:38 PM PDT by BGHater
Suit: Military Deducted Money From Service Members' Gov.'t Benefits or Tax Refunds
U.S. soldiers and veterans have been illegally hit up by Pentagon debt collectors for millions of dollars in payments over military credit card debt, according to the consumer advocacy group Public Citizen.
"It is shocking that a U.S. government agency would illegally take this money from veterans who have served our country well," said Deepak Gupta of Public Citizen.
Public Citizen and consumer lawyers have filed a class-action lawsuit against the Army and Air Force Exchange Services (AAFES), which issues credit cards to U.S. service members to buy goods at military stores. The suit alleges that AAFES improperly took money from military credit card users for expired debt and inflated penalties and fees. Unlike civilian debt collectors who use phone calls and letters to try to collect payment, the military simply deducted the money from service members' government benefits or tax refunds, the suit contends.
"To take away these benefits because of old debt incurred during military service to buy things like uniforms and equipment is outrageous," said Gupta.
Lead plaintiff Julius Briggs, a veteran of Operation Desert Storm, said that AAFES illegally withheld more than $2,300 from his disability payments. According to the suit, Briggs' debt was too old to collect, and AAFES also hit him up with inflated interest rates and penalty fees. Briggs claims the withheld money caused him to miss his housing payments, leaving him temporarily homeless.
The suit charges that AAFES has illegally appropriated millions of dollars from thousands of service members over the years.
The U.S. Department of Justice lawyer defending the case declined comment, but the government has moved to have the suit dismissed on sovereign immunity grounds. At the U.S. District Court in San Francisco this week, plaintiffs' attorneys argued the case should go forward.
"With any luck, this lawsuit will force AAFES to stop collecting money that it has no right to take," said Briggs.
‘but the government has moved to have the suit dismissed on sovereign immunity grounds’
????
You can’t sue me because I’m the government ie I’m your sovereign and am immune to your claims.
Not so shocking... Govt. agencies are expert at stealing and extorting $$. Forget about the mafia.... the govt. is the King of organized crime.
Having been in the military for 22 years...this AAFEs racket went into high gear in the mid-90s when they cooked up this charge card deal. Any GI could get a card and a certain amount of credit. The idea was that the credit would equal his rank in some fashion and there would be a limit.
What I noticed a year after implementation (I never got the stupid charge card)...was that half the guys who got a card...maxed it out. They could not handle money or credit. I’m guessing in this case...alot of solders are being medically discharged and they have debts owed to AAFEs...which is regular credit card debt and collectable. Bluntly....AAFEs is not a charity operation and by congress’s mandate...must sustain itself. So they will collect this money until congress tells them to halt.
Personally...this is an area that I’d rather not get into...because if we forgive these debts owed to AAFEs...then the remaining GI’s will get stuck paying higher prices to make up the losses. It won’t take them long to figure out that scheme. Here in Germany a few years ago...someone suddenly realized that gas at the AAFEs gas pump was a bit higher than what you’d expect...and some AAFEs general finally admitted that they inflated the price slightly...to lessen the cost of diapers at the BX. Bunch of folks stood up and asked what the heck diapers had to do with gas...and this scheme suddenly disappeared and diaper prices shot up twenty percent.
Its all a credit game...which someone has to pay and someone has to lose.
vaudine
Some of these soldiers do owe the debt. The way they go about collecting it could never happen in the civilian world. If an account is 30 days late the soldier’s Commander gets a letter stating so.
About 2 months ago, AAFES sent my Commander debt payment notices for a female soldier in my platoon for charges her husband made on the card before he was killed in Iraq. At the same time I had to give her that letter, I was also able to give her a check collected by my other soldiers that more than settled the account.
FYI, Public Citizen is one of Ralph Nader’s operations. Given what other posters have said there may be a real problem here, but I somehow suspect that Public Citizen didn’t take the case because it has the best interests of our fighting men and women at heart.
They spent the money and it is owed to AFFES. I have a card and when I spend money to get things I must pay it back. If I don’t then I should expect that AFFES should get their money back. Nothing wrong with this at all. AFFES is not a welfare company. People here should remember this.
Even though these soldiers rightly deserve admiration and consideration for their service, they (in getting and using the credit cards) are no different from any other citizen. Let’s reverse this discussion and say AFFES is WalMart and the soldiers are average Joes....does everyone still think AFFES is stealing money from the Joes and doesn’t have a right to be paid back?
Not paying debt, writing bad checks, or defaulting was the single biggest source of letters of counseling, letters of reprimand, and Article 15s.
There are many reasons for this. One of them is we basically pay our lower ranking enlisted troops of all services poverty wages.
AFFES issues the "STAR" card and used to simply ask the commander to get involved when payments were late or not made at all, but then the commander was acting like a 24/7 debt collector. So, AFFES was given the authority to garnish wages for debt owed.
Not saying it is right, but that is what happened.
I knew it was just a matter of time before the govenment got in on the “We finance E-1 and up” scam.
If they charged items and owe the money then they should pay it back. Why do you have a problem with people being held accountable for their (illegal)actions?
I agree that any money charged should be paid back but one must also look at what “inflated” interest and penalty fees are. Also back in the 90’s you had to be a member of the NCO club and the club card changed from an ID/check cahing card to a credit card. I told them I did not want a credit card, there answer was “just fill out this credit card application and we will decide if we give you a credit card”. I told them I would decide if I wanted a credit card and never joined the NCO club again. So credit cards were pushed on young adults who may have not been ready.
Judging by my days in the service, I doubt that much of the debt run up on the accounts was for uniforms and equipment.
Great post. I had the same situation as a company commander in Germany. I was constantly dealing with soldiers with debt problems. Phone bills were killing some of my guys (most were married and their wives were running up the tabs).
Lets face it, the bold truth is that many lower-enlisted soldiers just aren’t that bright. They get into these money problems out of stupidity. Or they get married too young to the wrong person and then all the problems start.
But hey, us officers aren’t perfect either. The problems I saw with offiecrs were different though, not debt problems but infidelity. I know many a case of an officer throwing his career away by cheating on his wife.
I don't know when you were in service (and thank you for that service) but my son has spent at least $1,000 on uniforms and equipment that are mandatory and not issued.
I was going to say that, but you did it for me.
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