Sears Settles Lawsuit for $72M
HOFFMAN ESTATES, Ill. (AP) _ Sears, Roebuck and Co. has agreed settle a class-action lawsuit, by paying millions of dollars in cash and coupons to 11 million of its credit card holders.
The disagreement began when balances on credit cards were transferred to one of its subsidiaries, the Sears National Bank, Sears said Tuesday. The new bank increased the credit card’s annual percentage rate.
Card holders said that was unfair. They claimed Sears had made a commitment to not increase the APR. But Sears said it didn’t do anything wrong and that card holders didn’t understand the company’s information on the terms of the change in credit.
Under the settlement, which still must be approved in U.S. District Court, Sears will pay $72 million in cash and coupons to about 3 million customers _ or about $23.80 each.
The combined amount of cash and coupons is 50 percent of the estimated incremental APR class members have paid and are expected to pay as a result in the change in credit terms, the company said.
The agreement also calls for Sears to send coupons worth $7.50 to all 11 million class members and to pay about $3 million for consumer counseling, protection and education, the company said.
Sears, based in the Chicago suburb of Hoffman Estates, has 845 full-line department stores and more than 2,000 off-the-mall stores nationwide.