Jewelry company agrees to repay customers for insurance charges
KRIS-TV Corpus Christi
AUSTIN — A jewelry company that signed people up for credit insurance without their consent must stop the practice and repay their customers, according to an agreement reached Tuesday with the attorneys general of Texas and 17 other states.
Friedman’s Jewelers also must begin providing clear disclosures of extra insurance charges to customers who apply for credit, according to the settlement. Friedman’s, which is based in Addison, did not admit fault.
It is unclear how much the settlement will cost Friedman’s.
“We’ll only know the final amount based on how many consumers come forward,” said Paco Felici, a spokesman for Texas Attorney general Greg Abbott.
Friedman’s has about 40 stores in Texas and about 420 nationwide.
Abbott sued Friedman’s in December 2004 after finding that the company routinely sold credit, property and disability insurance to low-income customers who applied for credit to buy jewelry, according to a statement from his office. The charges sometimes exceeded $100, depending on the amount of credit offered.
Customers had to pay the charges even when they did not request or approve the coverage, according to the statement. Some customers were paying for credit insurance even though they hadn’t signed the section of the purchase contract that authorizes the coverage.
Customers who noticed the insurance charges and complained were falsely told the coverage was mandatory to get credit from the store, Abbott said.
“It’s patently unfair that consumers who bought jewelry to commemorate an important event or as a special gift were illegally steered into costly insurance coverage for those items, often without their consent or knowledge,” Abbott said. ”
Friedman’s Texas customers can apply for restitution through Abbott’s office, but must do so by Jan. 11. Customers in other states must contact the offices of their attorneys general, Felici said.
Other states included in the settlement were: Alabama, Arkansas, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South Carolina and Tennessee.
A spokeswoman for Friedman’s did not immediately return a telephone call seeking comment.
Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
