ST. PAUL (AP) -- Two retailers -- The Zale Corp. and Circuit City -- have been cited by the state Department of Commerce for allegedly violating Minnesota insurance laws.
And Commerce Commissioner Jim Bernstein said other companies are likely to face citations, as well.
"Retailers have been ripping off Minnesota consumers for years. ... This is symptomatic of a much larger problem in Minnesota. This is not just Circuit City. It is not just Zale's. These two happen to be the first," he said.
The allegations involve the sale of credit life and credit disability insurance policies that are designed to pay the balance on a credit card if the holder dies or pay a limited number of monthly payments if the consumer is disabled.
In 2000, $90 million in premiums were collected for these products from Minnesota policyholders.
Irving, Texas-based Zale allegedly sold credit insurance policies to customers who didn't know they had bought a policy and misled the customers by not telling them about coverage limitations, exclusions or if they even qualified for coverage, according to the Commerce Department.
The company has about 20 stores in Minnesota and is still selling the insurance policies.
Susan Lanigan, general counsel for Zale, said the company disagrees with how the state interpreted several issues, but was trying to work out a settlement.
Meanwhile, Circuit City has already reached a settlement with the state.
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