HOFFMAN ESTATES, Ill. -- Sears, Roebuck & Co. has agreed to pay money and coupons worth $157.5 million to 11 million of its credit card holders to settle a class-action lawsuit.
Sears will pay $72 million in cash and coupons to about 3 million customers, or about $23.80 each. The company also will send coupons worth $7.50 to all 11 million plaintiffs and pay about $3 million for consumer counseling and education.The settlement announced by Sears on Tuesday must be approved in U.S. District Court.
The disagreement began when balances on credit cards were transferred to one of Sears' subsidiaries, the Sears National Bank, which increased the credit card's annual percentage rate.
Card holders said Sears had made a commitment to not increase the APR. But Sears said it didn't do anything wrong and that card holders didn't understand the company's information on the terms of the change in credit.
"This settlement has been reached in order to avoid costly and time-consuming litigation," said Sears Credit president Alan Lacy. "It will also assure our customers that we value their continued business."
In a separate case last month, Sears agreed to plead guilty to fraud and pay a $60 million fine for illegally pursuing debts from bankrupt credit card customers. It already has paid more than $180 million in restitution and $40 million in civil fines in connection with the scheme.