Sears to Pay Fine for Illegally Pursuing Debts

Sears, Roebuck & Co. agreed to plead guilty to fraud and pay a $60-million fine for illegally pursuing debts from credit card customers who had filed for bankruptcy, the retailer said. Under a deal with the federal government, Sears’ Bankruptcy Recovery Management Services unit will admit guilt to one count of bankruptcy fraud. Hoffman Estates, Ill.-based Sears has already paid more than $180 million in restitution to about 188,000 debtors and $40 million in civil fines to the attorneys general of all 50 states in connection with the scheme. Credit card debts are erased when customers file for bankruptcy. Debt collection or “reaffirmation” agreements allow cardholders to continue paying off their debt in exchange for keeping the credit card or merchandise bought on credit. Sears said it had also reached agreement with the U.S. attorney’s office on a civil lawsuit filed in April 1997 regarding the same practices. As part of that deal, Sears agreed to diligently file all reaffirmation agreements in U.S. Bankruptcy Court. Sears stock closed up 88 cents at $39.13 on the New York Stock Exchange.