Office of the Attorney General
Attorney General Stumbo Announces $2.15 million settlement with Friedman’s Jewelers
Kentucky Attorney General Greg Stumbo, along with attorneys general from 17 other states, announced today a settlement with Friedman’s Inc., doing business as Friedman’s Jewelers. The investigation of the nation’s third largest jewelry chain alleged that the jewelry company engaged in unfair or deceptive trade practices by failing to adequately inform consumers regarding insurance fees charged by Friedman’s. In January 2005, Friedman’s filed bankruptcy. At that time, Friedman’s had 560 jewelry stores in 21 states. Post bankruptcy, Friedman’s now has 427 jewelry stores in 20 states, including 29 stores in Kentucky.
During the investigation, the state attorneys general alleged that Friedman’s, when selling jewelry and financing the purchase, would charge additional amounts for credit life, credit disability and property insurance without adequately informing consumers that they were purchasing insurance. Under the terms of the settlement, Friedman’s has agreed to extensive injunctive relief requiring clear and conspicuous point of sale disclosures when offering credit insurance to consumers. Additionally, Friedman’s will be required to comply with licensing laws before offering credit insurance and Federal Truth In Lending laws. Friedman’s is paying $2,150,000.00 to the multi-state group under the agreement.
The states participating in the settlement are Alabama, Arkansas, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee and Texas. While entering into the settlement, Friedman’s has denied wrongdoing and all of the allegations. “We are pleased with this Agreement,” said Attorney General Stumbo. “It is important that consumers receive clear and adequate information when making a purchase and are not unfairly charged for products they do not want or need.”
The Attorney General offers the following consumer tips:
- When purchasing any goods or services with a financing agreement, carefully review the financing documents and inquire about any add on fees or costs above those you initially agreed or expected to pay;
- Before financing with an in-store financing option, check other financing options available to you and compare financing terms such as the interest rate;
- If you elect to purchase credit insurance for any transactions, make sure the company is licensed to sell insurance in your state and is in good standing.
- When deciding whether to purchase credit insurance, review the terms of the credit insurance contract for all exclusions and compare the price of the credit insurance to the amount that would be paid off.