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For Immediate Release:  
For Further Information Contact:
October 20, 2005

Office of The Attorney General
- Peter C. Harvey, Attorney General
Division of Consumer Affairs
- Kimberly Ricketts, Director

 

Jeff Lamm, Genene Morris
973-504-6327

 

Attorney General Peter C. Harvey Announces Settlement of Lawsuit with Circuit City Stores

NEWARK — Attorney General Peter C. Harvey announces the settlement of a lawsuit against Circuit City Stores Inc. (“Circuit City”) pursuant to which Circuit City has agreed to pay the State $173,220 in civil penalties and investigative costs and to comply with statutes and regulations governing advertisements.

This is the most recent litigation against Circuit City by the Attorney General’s Office. The consent judgement filed today settles a lawsuit filed in December 2004, against Circuit City. The lawsuit alleged that Circuit City violated New Jersey’s Consumer Fraud Act and Merchandise Advertising Regulations, as well as terms of a 1996 Agreement of Voluntary Compliance, in its advertisement of Zero Percent (0%) interest financing offers. The lawsuit also alleged violations for not having advertised items available for purchase and in the use of footnotes that explained terms and conditions relevant to consumers.

Circuit City also resolved 37 customer complaints since Consumer Affairs filed its lawsuit. Those consumers received $3,918 in refunds.

“A magnifying glass shouldn’t be required to read footnotes that tell consumers all the details of a seemingly great deal,” Acting Governor Richard J. Codey said. “Headlines proclaim but footnotes explain and this settlement prohibits the obscuring of any relevant information. We want consumers to know all the facts before they sign on the dotted line.”

“We make sure that customers get what they pay for and don’t get tricked out of their money by slick marketing campaigns. Circuit City will adhere to this agreement and the terms of the 1996 agreement of voluntary compliance,” Attorney General Harvey said. “Consumers are entitled to clear and conspicuous disclosure of the terms and conditions of the offers presented to them.”

Circuit City is paying $150,000 to settle the lawsuit brought by the State, and $23,220 in reimbursement for costs in investigating this matter.

Deputy Attorney General Nicholas B. Armstrong represented the State in this matter.

Under the settlement, Circuit City agrees to:

  • Comply with the State’s General Advertising Regulations;
  • Not utilize any type, size, location, lighting, illustration, graphic depiction or color resulting in the obscuring of any material fact, in the advertisement of Zero Percent (0%) interest offers and merchandise cards;
  • Have a sufficient quantity of sale items in inventory or otherwise available for immediate purchase;
  • Plainly mark all merchandise offered for sale with a stamp, tag, label or sign either affixed to the merchandise or located at the point where the merchandise is offered for sale; and
  • Comply with all provisions of the 1996 Agreement of Voluntary Compliance regarding advertisement of Zero Percent (0%) finance offers.

“It’s been said that the devil is in the details. But sometimes consumers have a devil of a time in first finding and then reading the footnotes that contain the details. Circuit City will provide those details to consumers in footnotes that are easy to find and read, as required in this settlement,” Consumer Affairs Director Kimberly Ricketts said.

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