TINA.org Complaint Prompts Ad Changes at Bob’s Discount Furniture

May 12th, 2015

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Bob’s Discount Furniture has agreed to be more upfront about the potential financial pitfalls of its “interest free” financing following a state inquiry that was prompted by a TINA.org investigation into the misleading marketing of the plan and its complaint to regulators.

The Connecticut-based company with 58 locations from Maine to Virginia has pledged to more clearly disclose the details of the 6- and 12-month financing options it heavily promotes to consumers; namely that failing to pay off the balance within the required time period will result in an exorbitant 28 percent interest backed charged on the entire purchase price, and that consumers have to pay more than the amount listed on the monthly statements to avoid that charge.

“We conducted a thorough review of their materials, and where we requested corrections they made those corrections and are in compliance,” said Claudette Carveth, a spokeswoman for the Connecticut Department of Consumer Protection (DCP).

Calling on the state to take action

TINA.org filed complaints with the DCP and Attorney General George Jepsen in November 2014 after receiving numerous complaints from consumers about the advertising of the financing plans.

Last fall, TINA.org staff also visited three Bob’s stores in Connecticut to see first-hand how the financing was presented to customers. Our investigation corroborated complaints that important terms and conditions were not adequately disclosed at the point of purchase.

The decision to call on state authorities to take action came after direct attempts by TINA.org to get Bob’s to change its advertising proved fruitless. (TINA.org sent Bob’s a warning letter in September 2014; Click here for a complete timeline.)

“It’s clear that the state saw a problem and the need for a change in the way Bob’s presented its interest-free financing to consumers,’’ said TINA.org Executive Director Bonnie Patten.

A sign in the Orange, Conn. store last fall.

A sign in the Orange, Conn. store last fall.

Less than six months after TINA.org filed its complaint with the DCP, the agency requested that Bob’s make changes to in-store signage that promotes its interest-free financing, according to a letter dated April 20 from Bob’s attorney Brian Leary to the state obtained by TINA.org.

The DCP also requested that the furniture store chain provide additional clarifying language on monthly invoices so that consumers know they have to pay more than the minimum balance listed on their bills each month in order to pay off the entire outstanding balance within 12 months to avoid back-charged interest on the full cost of the furniture.

Leary said in an email to TINA.org that Bob’s “volunteered to increase training and to make some minor modifications to program materials to make more redundant and more prominent the program details to consumers.”

Both the state and Bob’s did not respond to requests for copies of the revised materials.

Consumer complaints led to TINA.org investigation

Over the past two years, TINA.org has received numerous complaints from Bob’s customers who said they were shocked to discover back-charged interest fees in the hundreds of dollars. As recently as last month, a consumer contacted TINA.org saying a Bob’s salesperson did not tell him he had to pay off the whole bill in a year to avoid back-charged interest of $1,500, which came as a very unwelcome surprise.

Several other consumers said they had the cash to pay for their purchase in the store but a salesperson persuaded them to sign up for the financing instead.

“They talked me into this financing crap,” said Amalio Salerno. “If they would have said nothing about the financing, I would have paid in cash.”

He said he was billed more than $600 in accrued interest for the total cost of his initial purchase because he had an unpaid balance of only $200 at the end of 12 months.

Salerno and several other consumers who contacted TINA.org eventually received refunds after from BOB’s and/or Wells Fargo, which issues the financing.

Consumers who want to speak to a customer care representative at Bob’s regarding an issue with interest-free financing can contact 860-319-2311. A list of Connecticut consumer protection officials can be found here.

Find more of our coverage on Bob’s here.

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