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NYS AG settles fraud lawsuit with Sterling Jewelers

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Kay Jewelers
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Officials say some well-known jewelry stores that promote sparkling romance engaged in credit practices that consumers might not love.

New York Attorney General Letitia James and the Consumer Financial Protection Bureau announced Wednesday an $11 million settlement with Ohio-based Sterling Jewelers Inc. The settlement involves several brands, including Kay Jewelers and Jared The Galleria of Jewelry.

It resolves claims that consumers were signed up for store credit cards and enrolled in credit insurance without their knowledge or consent. It also says the terms of store cards were misrepresented. In many cases, consumers did not find out they were enrolled until they noticed fees on billing statements.

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Credit Jared The Galleria of Jewelry
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The AG says Sterling employees used a variety of tactics to deceive consumers into enrolling in store credit cards. In some cases, employees induced consumers to provide personal information by purporting to enroll consumers in a "rewards program" or discount program.

“By tricking consumers into enrolling in store credits cards, Sterling Jewelers betrayed customers’ trust and violated the law,” said Attorney General Letitia James. “This settlement holds the company accountable for its misconduct and ensures that no more consumers are deceived.”

Sterling's parent company, Signet Jewelers Ltd., disagrees with the allegations, but decided to avoid the time and expense of legal proceedings. The company says it is using the occasion to "reaffirm the transparency and fairness" of its credit-related policies.

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