Signet Jewelers: Consumer Watchdog Mulls Legal Action Over In-Store Credit Practices

(IDEX Online) – Signet Jewelers said it has been told by the US Consumer Financial Protection Bureau (CFPB) that it could take legal action against the jewelry retail giant regarding its in-store credit practices.

A notification from the firm says that the possible legal action would relate to Signet's "credit practices, promotions, and payment protection products." In addition, the New York state attorney general, Eric Schneiderman, is also investigating Signet for similar issues.

The jeweler, with more than 3,600 stores in the United States, Canada and Britain, said in the filing it cannot predict the timing, outcome or possible range of losses relating to either claim. Signet is cooperating with the investigations, although it does not believe the claims lack merit.

“Signet has been cooperating with the NYAG’s investigation which remains ongoing. Signet continues to believe that its acts and practices relating to the matters under investigation are lawful,” the jeweler said.

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, according to a report by CNBC.

The CFPB's website shows 585 complaints about Signet's Sterling jeweler business. The anonymous complaints talk about alleged attempts to reclaim money not owed, abusive language by debt collectors and fake accounts set up through identity theft.