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Circuit City Settles with New Jersey

October 21, 2005
Electronics retailer Circuit City has agreed to settle charges with the State of New Jersey, after Attorney General Peter Harvey sued the chain over some of its advertisements. The company will pay $173,220 in civil penalties and investigative costs and will comply with statutes and regulations governing advertisements.

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This is only New Jersey’s most recent litigation against Circuit City. The consent judgment settles a lawsuit filed in December 2004, against the company. 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,” 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.

“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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