One of the nation’s largest jewelry store chains, with outlets in the Capital District, will have to pay $11 million for improperly signing customers up for credit cards, according to Attorney General Letitia James.
According to a statement by James, employees at Sterling Jewelry Inc., which does business as Kay Jewelers, Jared the Galleria of Jewelry and other names, would sign up customers for credit cards and enroll customers in a credit insurance product without their knowledge or consent.
“By tricking consumers into enrolling in store credits cards, Sterling Jewelers betrayed customers’ trust and violated the law,” James said in a statement. “This settlement holds the company accountable for its misconduct and ensures that no more consumers are deceived.”
Sterling is based in Ohio and operates some 1,500 jewelry stores including 130 in New York state. There are local branches in Colonie Center, Crossgates Mall, Clifton Park Center and Mohawk Commons in Niskayuna.
The company imposed quotas on employees and based employee performance reviews and compensation on quotas, “creating intense pressure on employees to enroll consumers in store cards,” James said.
To accomplish that, she said, “Sterling employees used a variety of tactics to deceive consumers into enrolling in store credit cards.”
Among other tactics, employees would induce consumers to provide personal information by purporting to enroll consumers in a “rewards program” or discount program but in reality, sales reps would use that information to complete and submit credit card applications.
Often times, consumers did not know they had signed up for a credit card until they made a credit report inquiry or they received a card in the mail.
When consumers did know they were applying for credit, in some cased employees would misrepresent the terms of the credit, telling consumers there was no interest but ended up including a monthly financing fee.
Employees were also told to enroll consumers in credit insurance without their knowledge and didn’t know about it until they noticed fees for the product on billing statements.
The matter was handled for Attorney General James by Special Counsel Carolyn Fast of the Consumer Frauds and Protection Bureau under the supervision of Laura J. Levine, Deputy Bureau Chief of the Consumer Frauds and Protection Bureau, and Jane M. Azia, Chief of the Consumer Frauds and Protection Bureau.