Federated, FTC Settle Dispute Over Collections

Federated Department Stores Inc., whose chains include Bloomingdale’s and Macy’s, settled Federal Trade Commission charges that it illegally collected payments from credit card customers who had declared bankruptcy. The FTC claims are similar to those resolved last year in an $8.2-million settlement between the Cincinnati-based company and 20 states. The latest accord adds the weight of the consumer protection agency to that agreement, giving the FTC the ability to sue Federated if it reneges on its obligations to consumers. The complaints focus on Federated’s use of debt-repayment contracts, known as reaffirmation agreements, in persuading customers to pay bills that could have been forgiven by a bankruptcy court. The FTC said the store chain failed to file those agreements in court as required by law. Federated shares rose $2 to close at $54.50 on the New York Stock Exchange.