Kay Jewelers Clobbered With $11 Million Penalty

The penalty stems from signing customers up for store credit cards without the customer's knowledge.

Sterling Jewlers, the parent company of Kay Jewelers, and and Jared the Galleria of Jewelry, as well as other brands, have agreed to pay an $11 million settlement for signing customers up for store credit cards without their knowledge, as well as providing false information on the card's interest rate.

New York State Attorney General, Letitia James said:

By tricking consumers into enrolling in store credits cards, Sterling Jewelers betrayed customers’ trust and violated the law. This settlement holds the company accountable for its misconduct and ensures that no more consumers are deceived

Sterling Jewelers operated appoximately 130 store in New York State.

Sterling imposed store card enrollment quotas on employees and based employee performance reviews and compensation on the quotas, creating intense pressure on employees to enroll consumers in store cards.

According to the Attorney General, Sterling employees used a variety of tactics to deceive customers into enrolling in store credit cards.  In some cases, employees induced consumers to provide personal information by purporting to enroll consumers in a “rewards program” or discount program. In reality, sales representatives used the personal information to complete and submit credit card applications.

In addition, customers who actually did enroll in the store credit card, Sterling employees misrepresented the terms.