If you are considering a “zero-percent” or “no-interest” financing offer on that new big-screen 4K Ultra HDTV you have your eyes on, a class-action lawsuit filed against Best Buy this month should serve as a cautionary note before you apply.

According to the lawsuit (Stinson et al v. Best Buy Co., Inc., Case No. 18-cv-295, D. MN.) filed in Minneapolis February 1, plaintiff “Ruth Stinson, on behalf of herself and others similarly situated” alleged that Best Buy is deceptively promoting “0% interest” or “no interest” financing deals on big-ticket items like major appliances and consumer electronics products.

The case alleges Best Buy is improperly calling its offer “0% financing” when it is actually “a deferred interest” offer, because takers who don’t pay off the purchase in full within the specified period (18 months in Stinson’s case), are charged the full interest amount on the purchase retroactive to the date of sale without regard to payments previously made.

Read more after the jump:

Under a true no-interest financing agreement, the lawsuit states, Stinson would only be required to pay the balance of the transaction and interest on the unpaid balance at the regular interest rate. The case cites Consumer Financial Protection Bureau definitions in explaining the differences.

As was first reported on the website Truth In Advertising,

the case, which is being filed by Melissa S. Weiner of Halunen Law in Minneapolis, Minn., and others, alleges that a Best Buy salesperson rushed Stinson into accepting the “0% financing terms” without fully or adequately explaining them or the penalty that would result if a payment was late or missed.

The action alleges the customer wasn’t aware of the offer before being told about it in the store, wasn’t given a written copy of the full credit terms and didn’t have an opportunity to investigate or understand them.

“While some of Best Buy’s in-store displays note (in smaller print) that `interest will be charged to your account from the purchase date if the purchase price is not paid in full in 12 months,’ they do not inform consumers that interest will be retroactively applied on the entire purchase price at the end of the promotional period, as opposed to just the remaining balance,” the lawsuit reads.

The suit alleges the plaintiff had paid off a portion of the purchase price on time until she couldn’t make a payment and then was required to pay off the balance and full interest, which was about 25%, retroactive to the day of sale.

The lawsuit said Stinson would never have agreed to the repayment terms had she known them in advance.

The action further alleges that “Best Buy knowingly induced Plaintiff and members of the National Class to apply for and use its purported `0% interest’ or `no interest’ promotion by fraudulent, unfair, deceptive, unconscionable, and/or oppressive means.”

The action further alleges that Best Buy “knows that many consumers will not pay off the entire balance of their deferred-interest purchases before the end of the promotional period, thereby becoming subject to retroactive interest assessments.”

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 The lawsuit cites the Consumer Financial Protection Bureau (CFPB) saying, “only 56.9% of consumers with [credit] scores below 660 successfully paid off their balance at the end of the promotional period,” and “more than a third of people with both promotional and other types of purchases who are assessed deferred interest pay in excess of 150% of their promotional balance during that period.”

The plaintiff is asking for a jury trial, an accounting and disgorgement of the alleged “ill-gotten gains” derived by Best Buy’s conduct; punitive and exemplary damages; an injunction against Best Buy from engaging “in the same wrongful conduct going forward” and “costs and disbursements assessed by the plaintiff in conjunction with the action including attorney’s fees.”

In response to our query, Halunen Law’s Weiner told HD Guru: “We are pursuing this action. The complaint alleges that consumers are routinely deceived by Best Buy’s so-called 0% interest offers, only to be shocked by big lump sum interest charges after the promotion expires.  We look forward to working to remedy this deception.”

A Best Buy spokesman was looking into the matter but did not return our request for comment as this was posted.


By Greg Tarr


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