A settlement agreement will give Washington customers of Smith’s Home Furnishings who bought warranties on purchases from the defunct chain most of their money back.
General Electric Credit Corp., which underwrote Smith’s revolving credit plan, agreed last week to provide repair services or coupons good for purchases from other stores.
Many Smith’s customers, using Smith’s credit cards, paid as much as $400 for warranties on purchases like appliances and electronics. The store told buyers the value of unused warranties could be credited to new purchases after five years.
But the Portland-based chain filed bankruptcy in August 1995. When all the stores were closed the following October, customers had no place to go for service.
In November, four customers sued GECC, claiming it was responsible for fulfilling the terms of the warranty agreements if the goods were bought on its credit. The suit in August became a class action covering a potential 27,000 customers with $9 million in claims.
The company denied any liability in the settlement, but said litigating the issue could be long and expensive.
For those whose warranties were paid in full when Smith’s filed bankruptcy, GECC will provide service until expiration or February 1988, whichever comes first. Out-of-pocket costs for repairs will be reimbursed.
If those customers are entitled to warranty service beyond February 1998, they will receive a coupon worth 20 percent of the warranty for use at stores not yet designated.
Those who had not fully paid for their warranties will also be compensated, in some cases with coupons worth 100 percent of the purchase price of the warranty.
Extensive proofs are required to collect. Notification will be mailed to beneficiaries later this month.
A Spokane County Superior Court judge must still approve the deal.
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