Blog Enforcement Watch January 18, 2019

CFPB Announces $11 Million Settlement with National Jewelry Retailer

On January 16, the Consumer Financial Protection Bureau (CFPB)  and the State of New York announced that they had filed a consent order in the U.S. District Court for the Southern District of New York.to settle allegations that a jewelry retailer enrolled customers in credit cards and related products without their consent.

According to the complaint, the retailer engaged in deceptive practices in violation ​of the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 103​1, 1036(a)(1), 1054, and 1055, by opening store credit-card accounts without customer consent; enrolling customers in payment-protection insurance without their consent; and misrepresenting to consumers the financing terms associated with the credit-card accounts.  The retailer also allegedly violated the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., and its implementing regulation, Regulation Z, 12 C.F.R. part 1026, by signing customers up for credit card accounts without having received an oral or written request or application.  The New York Attorney General also alleged that the retailer violated several provisions of state law.

Per the consent order, the retailer will pay $10 million in civil money penalties to the CFPB and $1 million in civil money penalties to the State of New York.  The retailer has also agreed to injunctive relief designed to prevent the continuation of the alleged ​illegal conduct.