ATTORNEY GENERAL CURRAN ANNOUNCES SETTLEMENT WITH FRIEDMAN JEWELERS

Maryland Attorney General J. Joseph Curran, Jr. announced today that his Consumer Protection Division, working in conjunction with 17 other Attorneys General, has reached a settlement with Friedman’s, Inc., which trades under the name Friedman’s Jewelers. In the settlement, Friedman’s, Inc. has agreed to change its practices to provide clear and conspicuous point-of-sale disclosures when offering credit insurance to consumers.

The investigation of the nation’s third largest jewelry chain, alleged that the jewelry company engaged in unfair or deceptive trade practices by failing to adequately inform consumers regarding insurance fees. The States alleged that Friedman’s, Inc., when selling jewelry and financing the purchase, would charge premiums for credit life, credit disability and property insurance without adequately informing consumers that they were purchasing insurance.

In January 2005, Friedman’s, Inc. filed bankruptcy. At that time, Friedman’s had 560 jewelry stores in 21 states. After filing bankruptcy, Friedman’s has 427 jewelry stores in 20 states. Currently, Friedman’s, Inc. has five stores in Maryland.

Friedman’s, Inc. has denied any wrongdoing. However, under the terms of the settlement, Friedman’s has agreed to provide clear and conspicuous disclosures when offering credit insurance to consumers in the future. Additionally, Friedman’s has agreed to comply with Federal Truth in lending laws and with licensing laws before offering credit insurance. Friedman’s is paying $90,000 to Maryland under the agreement.

“It is important that consumers receive clear and adequate information when making a purchase and are not unfairly charged for products they do not want or need,” Curran said.

The Attorney General offers the following consumer tips:

• Before financing with an in-store financing option, check other financing options available to you and compare financing terms such as the interest rate;
  
• When purchasing any goods or services with a financing agreement, carefully review the financing documents and inquire about any add on fees or costs above those you initially agreed or expected to pay;
  
• Generally insurance that is sold as a part of a financing transaction is overpriced, so it is advisable to refuse to purchase it;
  
• When deciding whether to purchase credit insurance, review the terms of the credit insurance contract for all exclusions and compare the price of the credit insurance to the amount that would be paid off; and
  
• If electing to purchase credit insurance for any transactions, make sure the company is licensed to sell insurance in Maryland and is in good standing.

The other states participating in the settlement are Alabama, Arkansas, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee and Texas.