Consumer Law

Texas AG settles $4.5 million suit, including $100K to Center for Consumer Law

By Richard Alderman

 by Richard Alderman

Conn's, a Beaumont based electronics retailer, has agreed to pay $4.5 million to a customer restitution fund to settle a state lawsuit against it involving deceptive trade practices. They will also pay $250,000 in attorney's fees and $100,000 to the University of Houston Law Center's Center for Consumer Law. The money will be used by the Center to support the Texas Consumer Complaint Center.

The Consumer Complaint Center was founded three years ago through a similar grant from the state attorney general. The CCC is staffed by two attorneys and six law students, and works closely with the Law Center Consumer Clinic. Since its inception, the CCC has assisted thousands of consumers, resulting in recoveries and savings of over $2 million dollars.

The lawsuit came after reviewing more than 3,500 complaints received over three years by the state and the Better Business Bureau. The CCC?s Robert Johnson was instrumental in focusing the attorney general?s attention on the acts and practices of Conn?s. The attorney general said the retailer failed to honor warranties, deceptively exchanged refurbished products as new, and used aggressive sales practices to sell warranties to customers. In complaints, according to the state, consumers said Conn's delayed repair appointments for weeks or months, didn't repair items properly, ignored calls and ultimately refused to give refunds or replace the defective products. Often, customers who paid between $100 and $1,000 for warranties received used, refurbished goods instead of new products, the state claims.

Under its settlement, Conn's must provide customers copies of the extended warranty agreement at the time of sale, ensure that its sales personnel accurately represent rights, remedies or obligations in the warranty agreements, and refrain from adding extended warranty or credit insurance to invoices without written consent. If a product fails within 72 hours of purchase or delivery, Conn's must also replace it. If the product fails at the time of delivery, the company must remove and exchange it.

Full post as published by CL&P Blog on November 25, 2009 (boomark / email).