FinancialsMay 17, 2024
Richemont Appoints Van Cleef & Arpels’ Nicolas Bos as New CEOThe announcement coincided with its full-year results, with growth driven by its jewelry brands.
MajorsDec 05, 2017
Signet In-Store Credit Practices Being Investigated
Both the federal Consumer Financial Protection Bureau and the New York state attorney general are looking into them.
Akron, Ohio--Signet Jewelers Ltd.’s in-store credit practices and promotions have come under scrutiny from two government bodies, the retailer said in an SEC filing made late Friday.
In the company’s quarterly report to the Securities and Exchange Commission, the retailer states that the Consumer Financial Protection Bureau (CFPB) notified it via letter Sept. 6 that its Office of Enforcement is considering recommending that the CFPB take legal action against Signet for allegedly violating various provisions of the Consumer Financial Protection Act of 2010 and the Truth in Lending Act.
The Consumer Financial Protection Act was created in 2010 in the wake of the financial crisis, which many blamed in part on the “predatory” lending practices in the housing market, to give the government more oversight on financial transactions. The Truth in Lending Act has been around since the 1960s, and was created to protect consumers from unfair billing and credit card practices.
On the CFPB website under the consumer complaints section, a search of the term “Sterling Jewelers,” the name for the division that oversees Kay Jewelers and Jared the Galleria of Jewelry, brings up 585 complaints, out of the more than 900,000 total complaints on the site. (The site returned no results when the terms “Signet,” “Zale” and “Zales” were searched.)
The complaints, which are filed anonymously, include accounts of aggressive debt collectors, charges appearing on accounts that were believed to have been paid off, accounts that were opened as a result of identity theft, lack of responsiveness from customer service, and lack of clarity on the part of in-store employees.
One commenter who claimed to have visited a Jared store in Georgia over the summer wrote this: “While I was there my girlfriend was trying on rings, the manager pulled me to the side and told me he could do a quick check to see what kind of financing I would qualify for when the time comes. He clearly advised me this was not an application for credit, but a means of seeing how much credit I could be pre-approved for. I even double-checked and was clearly assured by [two other people] that this was not an application for any type of credit and would not cause a hard pull on my credit report. It turns out they were both knowingly lying and filling out a credit card application on my behalf.”
The
CFPB’s September letter stems from an inquiry that began in late 2016.
The New York state attorney general also is investigating the jewelry retailer’s in-store credit practices. That investigation is ongoing.
In response, Signet said that it believes the potential claims being investigated lack merit and noted that it has been cooperating with both regulators.
Signet began reviewing its credit practices in 2016, after analysts publicly began asking if the retailer was lending to too many consumers with low credit scores while also questioning how past-due accounts were being accounted for on its balance sheet.
In May of this year, the retailer announced plans to outsource its entire credit portfolio, beginning with the sale of $1.0 billion worth of prime-only accounts to Alliance Data System Corp, as well as the launch of a program run by a subsidiary of rent-to-own company Aaron’s Inc. that allows consumers who don’t qualify for credit to do a lease-purchase on jewelry.
Signet said on its most recent earnings call that it is still looking for a buyer for its non-prime accounts while also noting that the migration of the credit program resulted in lost sales in Q3.
The New York state attorney general also is investigating the jewelry retailer’s in-store credit practices. That investigation is ongoing.
In response, Signet said that it believes the potential claims being investigated lack merit and noted that it has been cooperating with both regulators.
Signet began reviewing its credit practices in 2016, after analysts publicly began asking if the retailer was lending to too many consumers with low credit scores while also questioning how past-due accounts were being accounted for on its balance sheet.
In May of this year, the retailer announced plans to outsource its entire credit portfolio, beginning with the sale of $1.0 billion worth of prime-only accounts to Alliance Data System Corp, as well as the launch of a program run by a subsidiary of rent-to-own company Aaron’s Inc. that allows consumers who don’t qualify for credit to do a lease-purchase on jewelry.
Signet said on its most recent earnings call that it is still looking for a buyer for its non-prime accounts while also noting that the migration of the credit program resulted in lost sales in Q3.
More on Majors
The Latest
FinancialsMay 17, 2024
Watches of Switzerland’s Fiscal-Year Sales Flat Looking ahead, the retailer said it sees “enormous potential” in Roberto Coin’s ability to boost its branded jewelry business.
Recorded WebinarsMay 17, 2024
Watch: Preparing for Trade Show SuccessJewelry trade show veterans share strategies for engaging buyers, managing your time effectively, and packing the right shoes.
Brought to you by
Record Gold Prices Have Consumers Undeterred. Here’s Why.Despite the rising prices, consumers continue to seek out the precious metal.
AuctionsMay 17, 2024
Piece of the Week: Cartier’s Ring-Tailed LemurThis little guy’s name is Ricky and he just sold for more than $200,000 at Sotheby’s Geneva jewelry auction.
Weekly QuizMay 16, 2024
This Week’s QuizTest your jewelry news knowledge by answering these seven questions.
AuctionsMay 16, 2024
Christie’s Holds 2 Sales Despite CyberattackThough its website has been down for a week, Christie’s proceeded with its jewelry and watch auctions on May 13-14, bringing in nearly $80 million.
AuctionsMay 16, 2024
Sotheby’s Withdraws 101-Carat Yellow Diamond from AuctionDespite the absence of “The Allnatt,” Sotheby’s Geneva jewelry auction totaled $34 million, with 90 percent of lots sold.
Brought to you by
From Registration to Return: 10 Tips to Protect You Before, During and After a TradeshowTradeshow risks are real. Get tips to protect yourself before, during and after and gain safety and security awareness for your business.
ColumnistsMay 16, 2024
The PR Adviser: What the Designer Should’ve DoneLilian Raji gives advice to designers on how to make the most of great publicity opportunities.
SourcingMay 16, 2024
Lucapa to Shed Stake in Lesotho Diamond Mine The mining company wants to divest its 70 percent holding in the Mothae Diamond Mine in an effort to streamline its portfolio.
ColumnistsMay 15, 2024
Squirrel Spotting: Why Retailers Struggle to Fire BrandsWhy do so many jewelers keep lines that are not selling? Peter Smith thinks the answer lies in these two behavioral principles.
AuctionsMay 15, 2024
Red Diamond Breaks Records at Phillips GenevaThe “Argyle Phoenix” sold for more than $4 million at the auction house’s second jewels sale.
Events & AwardsMay 15, 2024
See Who’s in JA’s 2024 ‘20 Under 40’ ClassThe annual list recognizes young professionals making an impact in jewelry retail.
IndependentsMay 15, 2024
David Mann Jewelers in Upstate NY to Close After 35 YearsOwner David Mann is heading into retirement.
FinancialsMay 15, 2024
Brilliant Earth’s Sales Fall Flat in Q1 While overall sales were sluggish, the retailer said its non-bridal fine jewelry was a popular choice for Valentine’s Day.
SourcingMay 14, 2024
Anglo American Confirms It Is Looking to Sell De Beers The mining giant also wants to offload its platinum business as part of an overhaul designed to “unlock significant value.”
AuctionsMay 14, 2024
2 Huge Yellow Diamonds Are Heading to AuctionChristie's is selling one of the diamonds, moving forward with its Geneva jewelry auction despite the cyberattack that took down its website.
GradingMay 14, 2024
Instappraise Adds Trifold Brochure to Appraisal OfferingsRetailers can customize and print the appraisal brochures from their store.
Lab-GrownMay 13, 2024
Lab-Grown Diamond Brand Lightbox Cuts Prices by 25 to 40%The move follows a price-drop test run in Q4 and comes with the addition of a “quality assurance card” from GIA for some loose diamonds.
TechnologyMay 13, 2024
Christie’s Website Brought Down by Hackers, Watch Auction Postponed The site has been down since Thursday evening, just ahead of its spring auctions.
AuctionsMay 13, 2024
Madeleine Albright’s Jewelry, Pins a White-Glove Sale at Freeman’s | HindmanThe late former U.S. Secretary’s collection went for quadruple the sale’s pre-sale estimate.
IndependentsMay 13, 2024
Zachary’s Jewelers Names Mother’s Day Jewelry Contest WinnersThree fifth graders’ winning designs were turned into custom jewelry pieces in time for Mother’s Day.
IndependentsMay 10, 2024
Frank Adams Jewelers Names New CEOKimberly Adams Russell is taking over the role from her father, David Adams, marking the third generation to hold the title.
CollectionsMay 10, 2024
Piece of the Week: Carina Hardy’s ‘Birth of Venus’ NecklaceAs a token of womanhood, this necklace depicts when Venus was born from the sea.
TrendsMay 09, 2024
Amanda’s Style File: Shine Bright, Moms Show your mother some love with a piece of fine jewelry.
IndependentsMay 09, 2024
Kyle Edward Fine Jewelry to Close Salisbury StoreThe company’s Easton location will remain open.
MajorsMay 09, 2024
JBT Elects New ChairmanBrian D. Fleming of Carla Corporation was elected to serve a one-year term in the role.
