Washington, DC - Interim Attorney General Eugene A. Adams announced today that retailer USA Discounters, Ltd., has agreed to reduce the maximum prices charged to customers in the District of Columbia, resolving allegations that the company's high markups on many credit sales had the effect of masking high interest rates.

USA Discounters sells home furnishings and auto accessories, often to consumers with impaired credit. The company is headquartered in Virginia Beach and has stores in the District of Columbia, Virginia, Maryland, Georgia, North Carolina, and Texas.

Under the agreement, USA Discounters has agreed to reduce the highest retail prices offered to credit customers by 21%. Under the federal Truth in Lending Act, charges imposed on credit customers, but not on cash customers, constitute "finance charges" that must be disclosed. These finance charges must also be included in the calculation of the disclosed Annual Percentage Rate (APR). Under District law, annual interest rates cannot exceed 24%.

"Prices for customers who buy on credit cannot be artificially inflated to hide the true cost of credit," said General Adams. "The prices that retailers use to comply with interest rate disclosures under federal law and with interest rate ceilings under District law must be bona fide retail prices."

As part of the settlement agreement, USA Discounters will pay $50,000 into the District Government's Consumer Protection Fund.

Consumers with questions about this action can call the Office of the Attorney General's consumer complaint hotline at (202) 442-9828. For consumer education tips and information on how to make an effective consumer complaint, go to the Office of the Attorney General website at http://www.oag.dc.gov/.