Suit Charges Military Exchange Service with Illegal Collections

The Army and Air Force Exchange Service is illegally collecting funds from soldiers and veterans who have military credit cards, according to lawsuit brought by Public Citizen, a Washington consumer advocacy group.

The first hearing on the suit was Thursday in the U.S. District Court for the Northern District of California. Public Citizen alleged that the service, which operates uniform and retail stores as well as recreation facilities on and near U.S. military bases, improperly took money from military credit card users for expired debt and inflated penalties and fees.

The military collected the money by deducting it from service members' government benefits or tax refunds, the suit contends. The suit further alleges that the organization has attempted to collect debts that have been outstanding for more than 10 years, which is forbidden by contract, and to collect amounts that are in excess of what the contract allows.

Army and Air Force Exchange Service spokesperson Judd Anstey said the organization does not discuss ongoing litigation.

While declining to discuss the suit, U.S. Army Lt. Colonel William Thurmond of the organization’s public affairs office said: “AAFES couldn’t do what they do if people didn’t pay for it.”

Deepak Gupta, a director with Public Citizen, said, “We are confident that the judge will issue a decision quickly and that the case will go forward.” If it does, Gupta said Public Citizen is likely to seek class action status.