October 28, 2002
Sears has agreed to pay $200,000 to settle an Arizona consumer fraud case that accuses the company of selling worthless maintenance contracts to customers who live in Mexico.
The complaint charged that Sears salespeople aggressively sold maintenance contracts to Mexican customers who were shopping in Arizona stores, without disclosing that Sears maintenance services aren't available in Mexico.
The settlement says that Sears did not follow through on a 1993 agreement to post service-contract rules in both English and Spanish. The chain says it will do so this time around. It also agreed not to sell in-home service to customers with addresses in Mexico.
Besides not fully explaining the service contracts, the lawsuit charged that Sears clerks claimed the contracts were "on sale" when in fact they were being sold at their customary cost. They also did not disclose that cheaper contacts were available, the settlement said.
Sears denied it tried to mislead customers and did not admit any wrongdoing in the settlement.
The settlement includes a $25,000 fine. Another $175,000 covers investigative costs and fees.
