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Is the AAFES Military Star Credit Card Screwing Over Veterans?

Written by Steve Rhode

Ashley Woods wrote to me and expressed grave concern about a situation she ran into with an AAFES Military Star credit card she owed.

It’s one thing to have a balance due but it’s quite another when the collection company appears to just make up what you owe.

Ashley she was contacted by Transworld Systems and appears to have gotten the run around on the debt. When she pressed them for direct answers about exactly what she owed, well, she got a different story.

Here is what Ashley said.

“In June of 2012, I reached out to AAFES to attempt to pay off a military star card, not knowing it already went to collections. They informed me there is nothing they can do, and that I must contact Transworld Systems, Inc.

When I contacted them I had to pay over $2000.00 just to get the payments within my budget. In December of 2014, I received a wage garnishment letter from Transworld. When I called, again they told me I must pay $2000.00 in order to stop the wage garnishment.

I sent a letter requesting the validation of the debt, I know I did not charge over $3000 on the card, the limit was not that high!

In Texas, 3rd party debt collectors are required to file a bond with the Secretary of State, this is a free charge. I could not find them in the system, so I also requested that info.

Here’s what happened:

They filed the bond the day after they received my certified letter.

I received a letter back with the following break-down:
Principal: $1, 317.77
Interest: $672.08
Collection Charge: $528.95
Total Balance: $2,518.80

The original letter I received in December states that I owed: $3,329.32

What does this mean:

  1. There is no explanation of why the debt went from $3, 329.32 to $2, 518.80. ($809.52 difference)
  2. 15 USC 1692f 808(1), 31 USC 3711g (6), and Texas Finance Code Ch 392 Sec. 303 all state that they cannot legally charge the $528.95 collection charge.
  3. Now with the balance of $1, 3717.77+672.08(interest)=$1, 989.85, less than what they wanted lump sum to start a payment arrangement.

So… they attempted to collect a total of $1,338.47 illegally from us. If they attempted to do this to us, how many other veterans were taken advantage of? If they did this to 10,000 veterans, that is $13,384,700 they illegally profited off of.

I am reaching out to other vets that have been contacted by this company. This is wrong!!”

Ashley said she would love to hear from others who might have also faced a similar solution. She said you can reach her at [email protected]

READ  FTC Versus NCO Debt Collector. FTC Wins $3.2 Million Penalty.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • I’ve emailed some of these with no response. I think because the article is old, but it’s still happening. Please give us help and we need to get the word out. It’s awful what they are doing and I’m sure illegal. Who can we call at AAFES?

    • The AAFES situation is tragic. The government hands out a credit card and then claims it is a government obligation and even goes so far as to garnish social security benefits. I’ll look into this and post a new article on what I find. Be sure to subscribe to the daily email updates so you are notified when I publish it.

      • Same thing is happening to me NOW! They said my original balance is 1100.00 and with all the late fees and interest the balance I owe them is 2300.00. I made them a settlement offer of 250.00 and they came back and said 1000.00 FINAL and wouldn’t negotiate at all and said I have until December 17th to decide YET last week they GARNISHED MY DISABILITY CHECK 200.00!!! I don’t know what to do!!! Also they sent me paperwork to fill out a HARDSHIP yet they won’t explain to me what a hardship even does, I’ve asked 3 people and get the run around! From what I can understand they say a hardship only basically allows me to set up a payment arrangement. ANY ADVISE FOR ME???
        I have to do something ASAP

  • Hi Steve I currently owe Military Star Card a little over $18K since 2009 I believe. I called a couple days ago and the collection dept told me to fill out a financial hardship application. I am presently not working only my husband. Have you heard any stories of someone applying for this and received good results. Im praying real hard that this will help my family to relieve us from this financial dept or lower it to the an amount that we can afford to payoff. Can you give me any pointers on how to answer some questions they may ask me? I have never filled out this type of application before for a creditor except for my school loans but it only reduced my payment not amount owed. This needs to disappear somehow!

  • It happened to me also ever since I retired in 2009 and I’m still paying for it.I know we all need to come together to do something about it and hopefully soon.

  • Same, I am 100% DAV straight out of the Army in 2006. Ive been paying this debt since then, Via garnishment from my Social security check. I had just under $7,000 in debt. Been paying over a decade, via garnishment. Now, I still owe over $20,000. I suppose the garnishment will last the rest of my existence.

  • Im in the same boat. They tell me that I owe like 10k for a 3000 dollar debt. I haven’t recieved an imcome tax return for like 7 years. I need answers and how to get these crooks to stop.

  • Same issue here I contacted TransWorld and they told me I owe $20,000 for a $6,000 debt. I have already paid over $6800. So it’s like I’ll never pay this off I’m just paying there fees.

  • I had a 2000 limit and had my taxes garnished for over 4000 TSI says I still owe 1900 I don’t know how this is possible! Is there any help?

  • Pretty much the same happened to us but before we could get a good response the garnishments had already started from my husbands VA benefits. we ended up paying almostb4000 for a 2000 limit.

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