GE Capital, Ward Credit Agree to Refunds

Customers of GE Capital and Montgomery Ward Credit will receive up to $70 million in refunds for unlawful debt collections under agreements between the two companies and the nation’s state attorneys general. The agreement, filed in Los Angeles County Superior Court, affects an estimated 60,000 consumers nationally who had been induced to sign unenforceable agreements to repay debts that had been dismissed in Bankruptcy Court. The two companies did not admit any wrongdoing. California Atty. Gen. Dan Lungren, whose office and the Missouri attorney general’s office were the lead agencies in the multi-state probe, announced the settlement. Lungren said about 30,000 of the affected consumers are Californians. The firms handle credit accounts for more than 3,000 retailers. The agreement provides that the firms will identify affected consumers from Jan. 1, 1993, to the present; cancel unlawful bankruptcy debt agreements; repay funds collected under those pacts, plus interest; and forgive late fees and other charges. The firms also agreed to reimburse the states for $24.5 million for the costs of their investigations and to provide $3 million for a consumer education program.