Sterling Jewelers' Fake Credit Cards

Sterling Jewelers (the owner of Kay Jewelers and Jared Galeria) recently was fined by the Consumer Financial Protection Bureau (CFPB) and the New York Attorney General (NYAG). The CFPB and NYAG alleged that Sterling Jewelers opened credit cards and enrolled consumers in credit protections without their consent. The consent order between Sterling and the CFPB and NYAG provides for $11 million dollars in civil penalties.

Let us answer your questions about the Sterling Jewelers' fake credit cards:

What happened at Sterling Jewelers?

Sterling Jewelers operates about 1,500 jewelry stores in all 50 states. Sterling does business as Kay Jewelers, Jared The Galleria of Jewelry, and number of other brands, like JB Robinson Jewelers, Marks & Morgan Jewelers, Belden Jewelers, Goodman Jewelers, LeRoy’s Jewelers, Osterman Jewelers, Rogers Jewelers, Shaw’s Jewelers, and Weisfield Jewelers.

Sterling Jewelers apparently placed pressure on employees to open store credit cards and sell Sterling credit products. For instance, Sterling placed quotas on employees to open a certain amount of credit accounts per day. If employees did not meet these quotas, Sterling would reprimand them, or even fire them.

Sterling’s quotas and performance standards resulted in the following allegedly unlawful activities:

I. Sterling opened credit card accounts without consent.

  • Employees requested consumer information without disclosing it was used to apply for credit cards.
  • Employees requested consumer information for credit checks, but used that information to apply for credit cards.
  • Employees requested consumer information for "rewards cards," loyalty programs, newsletters, or mailers, but used that information to apply for credit cards.
  • Employees requested consumer information for a "survey" or for custom orders, but used that information to apply for credit.
  • Employees used deceptive terms to hide the fact that consumers were applying for credit cards.
  • Employees told consumers applying for credit would not harm or effect their credit report.

II. Sterling mislead consumers about credit card terms.

  • Consumers were offered interest free credit cards, but got credit cards that weren't interest free.
  • Consumers were offered low-interest credit cards, but got credit cards with regular or high interest rates.
  • Consumers weren't told the interest, fees, charges, or terms of their credit card because employees fill-out credit card applications.

III. Sterling enrolled consumers in Payment Protection Plans without consent.

  • Employees told consumers to "sign here" or select "Yes" to hold an item, process an order, or verify information, when, in fact, "signing here" or selecting "Yes" was used to enroll consumers in PPP.
  • Employees took it upon themselves to add PPP to consumer accounts without the consumers' knowledge.
  • Employees told consumers to sign up for PPP so employees could meet quotas, and that consumers could then cancel PPP later.
  • Employees told consumers they were getting informational packets about PPP, but consumers really were signing up to purchase PPP.

Based on the CFPB’s filings, it seems Sterling’s practices were widespread. For example, the CFPB stated that, from 2013-2017, “over one million Sterling credit-card accounts were opened based on applications completed and submitted in Sterling’s stores and then never used by consumers who had supposedly applied for them.”

If you would like to read the CFPB and NYAG materials on Sterling’s deceptive practices, here is the CFPB/NYAG press release, the Sterling Jewelers Complaint, and the Sterling Jewelers Consent Order.

Can I do anything if Sterling Jewelers harmed or deceived me?

It depends. The alleged unlawful practices Sterling Jewelers engaged in could violate various laws, including federal laws like the Truth in Lending Act and the Fair Credit Reporting Act, and state laws like Pennsylvania’s Unfair Trade Practices and Consumer Protection Law and Pennsylvania’s Goods and Services Installment Sales Act.

Here are the types of damages that may be available for the practices the CFPB and NYAG claim Sterling Jewelers engaged in:

  • Statutory Damages: these can range from $500 to $5000.
  • Actual Damages: these will compensate you if you paid interest, fees, or charges you should not have paid, or if your credit score or ability to obtain financing was harmed.
  • Treble Damages: these provide triple recovery for any monetary harm or unlawful fees, interest, or other charges you paid.
  • Punitive Damages: these act as a type of penalty and seek to compensate victims of intentional or reckless conduct.

If you think Sterling Jewelers, including Kay Jewelers or Jared Galeria, harmed or deceived you, read our pages on consumer loan problems and credit report problems. You also can contact us for help.

If you're getting sued on a Kay Jewelers or Jared credit card, contact BCJ Law.

The unlawful practices detailed by the CFPB and the NYAG have important consequences for people getting sued on a Kay Jewlers credit card, Jared credit card, or other Sterling Jewelers branded credit card.

Sterling Jewelers often sells deliquent credit cards to debt buyers, like DNF Associates, who then try to collect on the account for profit. If you’re credit card was affected by any of the unlawful practices described by the CFPB or the NYAG, you likely have a defense to paying back the card. Not only that, you may have claims if a debt buyer or debt collector is trying to collect unlawful fees from you.

Read our pages on debt defense and debt harassment if you’re getting sued on a Sterling Jewelers credit card, or if a debt collector is trying to collect on a Sterling Jewelers credit card.

Hire BCJ Law to help!

If you believe you were affected by Sterling Jewelers unlawful credit card and payment protection practices, please contact BCJ Law for help. To get a free case review, call us at 1-800-997-5561 or complete our contact form.

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