Attorney General's News Release

October 17, 2006

Missouri to receive $25,000 from major jewelry chain as part of nationwide agreement, Nixon says

Jefferson City, Mo. — Attorney General Jay Nixon and the Attorneys General of 17 other states have reached a settlement with Friedman's Inc., which does business as Friedman's Jewelers, to resolve allegations that the company engaged in unfair and deceptive trade practices by failing to adequately inform consumers regarding insurance fees it charged.

Friedman's, the nation's third largest jewelry chain, will pay $2,150,000 to the participating states as part of the assurance of voluntary compliance, including $25,000 in court costs to the state of Missouri. Friedman's has one Missouri store, located in Kennett.

Nixon says the settlement resolves the states' allegations contained in a lawsuit filed in December 2004 that Friedman's, when financing the purchase of jewelry sales, would charge premiums for credit life, credit disability and property insurance without adequately informing consumers that they were purchasing insurance. The states alleged that consumers would often have insurance coverage and pay for it without realizing it.

“We were concerned that consumers were not getting clear and adequate information when making purchases from Friedman's and getting unfairly charged for insurance coverage they did not want or need,” Nixon said. “We are pleased with this agreement, which should put a halt to such practices.”

Friedman's also will be required to provide clear point of sale disclosures when offering credit insurance to consumers in the future, and comply with licensing laws before offering credit insurance.

Nixon offers the following tips to consumers:

• When purchasing goods or services with a financing agreement, carefully review the financing documents and ask about any add-on fees or costs above those you initially agreed to or expected to pay;
• Before financing with an in-store financing option, check other financing options available to you and compare terms such as the interest rate;
• If you elect to purchase credit insurance for any transactions, make sure the company is licensed to sell insurance in Missouri and is in good standing; and
• 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.

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Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818