The United Services Automobile Association, or USAA, has been hit by what could be classified as a potential class-action lawsuit over its treatment of non-officer customers, filed by six current or former members.
Six current or former USAA members in the lawsuit have alleged that the insurer is treating enlisted personnel and military family members as second-class customers, while non-commissioned and commissioned officers are given special privileges and placed in a premium officer class.
USAA Faces Potential Class-Action Lawsuit Over Alleged Discrimination Against Non-Officer Members
The lawsuit also alleged that two-thirds of USAA members are made to believe that they are a privileged class by an unfair and deceptive promise that USAA has systematically breached. The lawsuit was filed on Friday in San Antonio.
The lawsuit alleged, “In truth, USAA reserves real membership and its concomitant benefits exclusively for customers from the officer class (in particular, commissioned and senior non-commissioned officers, officer candidates, and their unmarried widows). USAA secretly relegates all other customers — in particular, enlisted personnel and military family members — to nominal or ‘fake’ member status.”
San Antonio-based USAA responded to the complaint on Monday and, in an email, said, “USAA is well known for its exceptional service to the military community and their families. We believe this suit is meritless and look forward to responding to the allegations in court.”
USAA was created in 1922 by a group of 25 Army officers as an insurance company to protect each other’s holdings. The company has been providing insurance, banking, and retirement benefits to more than 13 million members of the U.S. military, veterans, and their families.
The plaintiff who filed the potential class lawsuit alleged that the company had created a scheme that costs more for the members and also denies them the annual distributions or allocations, as those insured through USAA have. The lawsuit alleged that the company had contravened Arizona’s unfair insurance practice act and violated consumer fraud acts in Arizona, Illinois, and New Jersey.
The lawsuit is much akin to the lawsuit pending in federal court in Southern California, though it represents the members who live in the state only.
The plaintiffs who filed the lawsuit include two people from Texas, who live in Austin and Lindale, and residents from Arizona, California, Illinois, and New Jersey. Three of the plaintiffs have served in the Army while two have served as Marines. The lone sixth member is an adult family member of a USAA member.
