More than 500 Idaho residents who purchased service contracts from Smith’s Home Furnishings will be guaranteed those benefits, Idaho Attorney General Alan Lance announced Friday.
Smith’s went out of business in August 1995. It had stores throughout the Northwest, including Spokane and Boise.
The store aggressively marketed its warranty service contracts good for up to five years on furniture, electronics and appliances, Lance said. Customers were promised that, if they did not use their service contracts, they would get in-store credit toward the purchase of other goods.
After the bankruptcy, customers worried that they were paying for worthless service contracts.
Smith’s often sold its financed agreements to third parties such as American General Finance Inc.
The state reached agreement with American General Finance to honor the contracts, Lance said. The agreements apply only to those who purchased an extended warranty on their Smith’s revolving account and still owed money on that warranty purchase at the time of the bankruptcy.
The settlement doesn’t apply to people who paid for service contracts before August 1995.
“We wish we could have included these people in our settlement,” Lance said, explaining that Idaho consumer protection laws wouldn’t allow that.
The average value of the service contracts is $306, Lance said.
Further information is available from Deputy Attorney General Brett DeLange at the toll-free phone number (800) 432-3545.
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