GUILDERLAND — Sterling Jewelers Inc. — doing business as Kay Jewelers, Jared The Galleria of Jewelry, and several other brands — had agreed to pay $11 million in penalties after an investigation by the state Attorney General’s Office and the Consumer Financial Protection Bureau showed that Sterling signed consumers up for store credit cards without the their knowledge or consent.

Sterling also enrolled consumers in a credit insurance product without their knowledge or consent, according to a release from the Attorney General’s Office, and misrepresented the terms of the store cards.

Sterling is based in Ohio and operates approximately 1,500 jewelry stores, including around 130 stores in New York.

One of them, a Kay Jewelers shop, is located in Guilderland’s Crossgates Mall.

Victoria Mello, the manager of the Crossgates branch, said this week that she could not comment on the practices at her store. She referred questions to the corporate office, which did not return calls before press time.

“There are no restitutions in this case,” Morgan Rubin, deputy press secretary with the Attorney General’s Office, told The Enterprise in an email. The $11 million will go into a state general fund, she stated.

Sterling offers a store-branded credit card that can be used only at Sterling stores. Sterling imposed store card enrollment quotas on employees and based employee performance reviews and compensation on the quotas, creating intense pressure on employees to enroll consumers in store cards, according to the release, which explains the tactics this way:

Sterling employees deceived consumers into enrolling in store credit cards by inducing them to provide personal information by purporting to enroll consumers in a “rewards program” or discount program. In reality, sales representatives used the personal information to complete and submit credit-card applications. Consumers often did not find out that they had applied for a card until they noticed an unexplained inquiry on their credit report or received the card in the mail.   

In addition, when consumers knew they were applying for credit, Sterling employees misrepresented the terms of the store credit cards. Sterling employees told consumers that they were being enrolled in a “no interest” promotional financing plan, when in reality they were signed up for a plan that included monthly financing fees.

Finally, the release says, Sterling enrolled consumers in credit insurance offered in connection with the store credit cards without consumers’ knowledge or consent. In many cases, consumers did not find out that they were enrolled in credit insurance until they noticed fees for the product on billing statements.

This matter was handled for Attorney General James by Special Counsel Carolyn Fast of the Consumer Frauds and Protection Bureau under the supervision of Laura J. Levine, Deputy Bureau Chief of the Consumer Frauds and Protection Bureau, and Jane M. Azia, Chief of the Consumer Frauds and Protection Bureau.