Signet Jewelers Being Examined by FEDS

This is why you should buy local from places like The Diamond Center – Your local jewelry store in Janesville & Madison!

Consumer watchdog group the Consumer Financial Protection Bureau (CFPB) has notified Signet Jewelers — the parent company of Zales, Kay Jewelers and Jared — that it may take future action against the company for its in-store credit practices.

The notification, which Signet received on Sept. 6, stated the potential action would pertain to Signet’s “credit practices, promotions, and payment protection products.” It relates to an inquiry made in late 2016. The New York state attorney general, Eric Schneiderman, is also investigating Signet for similar issues.

Through its retail chains, Signet is known for offering credit to consumers — particularly those with less-than-stellar credit scores. During this fiscal year, a reported 62 percent of its $3.9 billion in sales in its “sterling jewelry” business was offered on credit. To reduce its balance sheet risk, Signet sold $1 billion in prime accounts to Alliance Data Systems earlier this year. The firm has elicited 585 complaints from consumers, according to the CFPB website. Those complaints include attempts at collection of funds not owed, abusive debt collectors and fake accounts created via identity theft. The complains, like all complaints to the CFPB, are anonymous and cannot be verified.

“It’s like they try and make you keep the rings, so all around it was game after game,” one consumer wrote in March. “I was also told by the store manager that I didn’t own them anything at all and now I’m being charged [redacted amount].”

“Store cards were opened in my name and birth date with an unknown Social Security number,” wrote another frustrated consumer in May. “[The] creditor sent cards to an address I never resided in a state I never resided.”

Signet, owner of jewelry chains Zales, Kay and Jared, has long been scrutinized for its extensive offering of credit, particularly to those with low FICO scores. For this fiscal year, 62 percent of its $3.9 billion sales in its “sterling jeweler” business were offered on credit. This division includes Kay, Jared and their respective outlets..

The potential investigation comes at a hard time for Signet. The jewelry company swung to a loss the third quarter of this year, in part driven by industry-wide slower sales of engagement rings. Earlier this year it faced claims of sexual harassment, which it has denied. Its CEO Mark Light stepped down this summer for health reasons. Shares of Signet, which has a market capitalization of $3.1 billion, were down 1.52 percent on Friday in after-hours trading on low volume.

CPFB, the watchdog agency set up to protect consumers after the recession, last year fined Wells Fargo $100 million for illegal sales processes. It has also been investigating housing online realty company Zillow.

READ MORE ABOUT THIS TOPIC:

• Signet Jewelers discloses that the consumer watchdog is considering legal action for its in-store credit practices
• Signet Jewelers Face CFPB Action
• Feds Investigate Signet’s Credit Practices
• Signet Jewelers’ in-store credit practices being examined by consumer advocates
• Signet Jewelers is under scrutiny for its financing and credit practices