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Sterling Jewelers pays $11M in fines due to consumer fraud

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Sterling Jewelers pays $11M in fines due to consumer fraud

Sterling Jewelers LLC settled parallel claims by the Consumer Financial Protection Bureau and the state of New York alleging that the company opened store credit card accounts and enrolled customers in payment-protection insurance without their consent, and misrepresented credit card financing terms.

The company paid a $10 million civil money penalty to the CFPB and a $1 million penalty to the state of New York as part of the settlement, as well as injunctive relief to prevent further illegal conduct.

New York Attorney General Letitia James said in a release that the compensation of Sterling Jewelers' employees was based on meeting a credit card enrollment quota, which pressured employees to use underhanded tactics to meet the quotas. Employees would tell customers they were signing up for a rewards program, then use the information provided to sign the customers up for credit card applications. The company also told customers that they were being enrolled in a no-interest promotional financing plan, even though the plans had monthly financing fees.

The company is a subsidiary of Signet Jewelers Ltd.