By Joseph Spector, Albany Bureau Chief
ALBANY -- DirectBuy has reached a $500,000 settlement with New York for deceptive sales practices, Attorney General Eric Schneiderman said Thursday.
Attorney generals from 27 states sued DirectBuy after Consumer Reports found that the buying club, which has stores in New York City, Rochester and Elmsford, Westchester County, had engaged in misleading and deceptive sales practices.
The attorney generals in 2011 rejected a settlement with the Indiana-based company. Schneiderman said New York has reached an agreement, and consumers will be able to seek restitution.
"DirectBuy lured consumers into expensive memberships by promising exclusive member-only deals with substantial savings over retail prices. This company failed to deliver on its promises by taking advantage of consumers who were looking to save hard-earned money," Schneiderman said in a statement.
Consumers pay a fee to join the club and are expected to get savings on merchandise, such as furniture and appliances. But the lawsuit claimed the company did not provide the savings.
The agreement, Schneiderman said, will require the company to stop the deceptive practices and maintain a three-day cancellation and refund procedure.
Under the agreement, New York club members are eligible for restitution of their membership fees if they entered into a DirectBuy contract after January 1, 2007, and have filed a complaint about the business by April 1.
There was no immediate comment from the company.
Consumers who purchased a membership from DirectBuy store that has since closed may also be eligible for restitution, Schneiderman said, if there is not a store within 25 miles of the closed one.
To file a complaint, call the attorney general's office at 914-422-8818.
DirectBuy locations in New York are:
• DirectBuy of Albany, 356 Troy Schenectady Rd., Latham, NY 12110-3354
• DirectBuy of Brooklyn & Queens, 72-25 Queens Blvd 2nd floor, Woodside, NY 11377
• DirectBuy of Long Island, 20 Oser Ave, Hauppauge, NY 11788
• DirectBuy of Rochester, 45 Saginaw Dr., Rochester, NY 14623
• Direct Buy of Westchester County, 2269 Saw Mill River Road, Bldg 1S, Elmsford, New York, 10523