Signet Jewelers unit pays $11 mln fines to end U.S., New York probes
today Jan 16, 2019
Sterling Jewelers Inc, whose brands include Kay Jewelers and Jared, has agreed to pay $11 million in fines to settle charges by U.S. and New York regulators that it signed up consumers for store credit cards and credit insurance without permission.
The settlement announced on Wednesday calls for Sterling, a unit of Signet Jewelers Ltd, to pay $10 million to the U.S. Consumer Financial Protection Bureau and $1 million to the office of New York Attorney General Letitia James.
Sterling did not admit or deny wrongdoing.
James said Sterling pressured employees to enroll customers in store-branded credit cards by setting quotas, and tying performance reviews and pay to whether the quotas were met.
She said the Akron, Ohio-based company also tricked consumers into providing personal information to enroll in what they thought were “rewards” or discount programs, only to use the information to submit credit card applications.
Even when consumers wanted credit cards, Sterling misled some into thinking they were getting “no interest” financing, when in fact there were monthly financing fees, James added.
“This settlement holds the company accountable for its misconduct and ensures that no more consumers are deceived,” James said.
Sterling has about 130 stores in New York, James added.
Signet disclosed the investigations in December 2017. It will recognize an $11 million pre-tax charge for the settlement in the quarter ending Feb. 2, 2019.
In a statement, Signet said it disagreed with the allegations, but cooperated fully with the probes and “looks forward to continuing to provide our customers with access to suitable credit options.”
The company said it is the largest specialty jewelry retailer in the United States, United Kingdom and Canada, with roughly 3,600 stores including the Zales brand.
Signet shares rose 45 cents to $34.27 in morning trading.
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