Newspaper article THE JOURNAL RECORD

Friedman's Agrees to Settlement with 18 States over Credit- Insurance Practices

Newspaper article THE JOURNAL RECORD

Friedman's Agrees to Settlement with 18 States over Credit- Insurance Practices

Article excerpt

Friedman's Inc., the nation's third-largest jewelry chain, has agreed to a settlement with 18 states, including Oklahoma, over the company's alleged failure to disclose adequately the costs of credit life and other credit-related insurance.

Don Hardin, administrator of the Oklahoma Department of Consumer Credit, said Friedman's will pay the suing states $2.15 million. Oklahoma will receive $25,000, which the agency will use for enforcement and consumer education.

"We are pleased with this agreement," said Hardin. "It is important that consumers receive clear and adequate information when financing a purchase and that they are not unfairly charged for products they do not want or need."

The states contended that Friedman's charged jewelry customers for credit life, credit disability and property insurance without fully informing them they were purchasing insurance.

The first lawsuits were filed in December 2004. Friedman's filed for Chapter 11 bankruptcy protection the next month.

According to information from the Oklahoma agency, Friedman's has 427 stores in 20 states, including seven in Oklahoma.

State officials estimate that Friedman's collected about $46.7 million in insurance premiums from customers in all of the involved states.

In an Assurance of Voluntary Compliance with the 18 states, Friedman's agreed to several conditions, including clear and conspicuous point-of-sale disclosures about any warranties or credit insurance, including the fact that it is an optional purchase. The information about credit insurance must also be offered orally and made a part of sales contracts.

Friedman's also agreed not to engage in misleading, unfair or deceptive business practices.

The company will also be required to comply with relevant state laws, including Oklahoma's truth-in-lending and licensing laws. …

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