Signet Jewelers Fined $11M Over In-Store Credit Cards

Akron, Ohio—Signet Jewelers has agreed to pay $11 million in fines after its in-store credit practices caught the eye of regulatory agencies, though the jewelry giant has not admitted to any wrongdoing.

Sterling Jewelers, the unit comprised of Kay Jewelers and Jared the Galleria of Jewelers along with a few regional brands, has been ordered to pay $10 million to the U.S. Consumer Financial Protection Bureau and $1 million to the office of New York Attorney General Letitia James.

James accused the company of pushing employees to sign customers up for in-store credit cards by setting sign-up quotas and linking the number of customers signing up to employees’ performance reviews and compensation.

The New York attorney general also said Sterling misled customers into thinking they were signing up for a rewards program but then used their information to file credit card applications. Consumers didn’t know they had signed up for a credit card until they received a credit report inquiry or the card showed up in their mailboxes.

Even in situations when customers knew they were applying for credit cards, employees allegedly misrepresented the terms by telling customers they were being enrolled in “no interest” promotional financing plans when, in fact, there were monthly financing fees.

Lastly, the attorney general’s office said consumers were enrolled in credit insurance—a type of policy that pays off a debt in the case of an unforeseen circumstance—connected to their in-store credit cards without their knowledge or consent.

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

Signet said in a statement that while it disagrees with the allegations, the company has chosen to settle to avoid the time and cost of continued litigation.

“We have used this opportunity to internally reaffirm the transparency and fairness of our credit-related policies, and we look forward to continuing to provide our customers with access to suitable credit options,” the jewelry retailer said.

Signet took a deep dive into its credit practices back in 2016 after analysts began commenting on the amount of subprime debt weighing heavy on its books, meaning the company might have been lending to too many consumers with low credit scores.

The company announced plans to outsource its credit portfolio back in May 2017, selling $1 billion worth