Beaumont-based retailer Conn’s Inc. is required to reform its business practices and establish a $4.5 million restitution fund for its customers under an agreement announced Tuesday with the Texas Attorney General’s office.
In May, the state agency charged Conn’s with failing to honor product warranties, misleading customers about the nature of its products, false advertising and other violations of the Texas Deceptive Trade Practices Act.
Based on more than 3,500 customer complaints, the Attorney General found that Conn’s stores “unlawfully relied on aggressive and deceptive sales tactics to increase its extended service warranty sales for appliances, electronics and other products.”
“Just in time for the holiday shopping season, today’s agreement fundamentally reforms how Conn’s does business,” Texas Attorney General Greg Abbott said.
Under the agreement, Conn’s must also refrain from adding extended warranty or credit insurance products to customers’ invoices without their written consent.
Other provisions require Conn’s to:
- Replace a product if it fails within 72 hours of purchase or delivery to a customer’s home with an identical or similar model. If the product fails at the time of delivery, the Conn’s delivery team must remove the product and exchange it.
- Compensate customers who were harmed from the $4.5 million customer restitution fund. The Attorney General’s office is reviewing customer complaints and other data to determine how to administer the restitution fund.
- Provide customers a copy of the extended warranty agreement at the time of sale. Conn’s also must ensure that its sales personnel accurately represent rights, remedies or obligations contained in the extended warranty agreements.
- Pay $250,000 in attorney’s fees and $100,000 to the University of Houston Consumer Law Clinic.
Customers with questions should call (800) 252-8011 or visit the attorney general’s Web site at www.texasattorneygeneral.gov.
