The New York Attorney General just entered into a settlement with Sterling Jewelers Inc. -- also known as Kay Jewelers and Jared The Galleria of Jewelry -- resolving allegations that the company signed up consumers for store credit cards and credit insurance without their consent and misrepresented the terms of the store cards.  

As part of the settlement, Sterling, which operates about 1500 stores, will pay a whopping $11 million in penalties.

The NYAG alleged that Sterling employees used a variety of tactics to deceive consumers into enrolling in store credit cards, such as by inducing consumers to provide personal information by purporting to enroll consumers in a reward or discount program. The NYAG also alleged that when consumers knew they were applying for credit, Sterling employees misrepresented the terms of the cards by, for example, telling them that they were being enrolled in a “no interest” promotional financing plan, which was not the case.  

In addition, the NYAG alleged that Sterling enrolled consumers in credit insurance without their consent and that consumers only learned about the insurance when they noticed the fees on their billing statements.

In announcing the settlement, the NYAG said that Sterling imposed store card enrollment quotas on employees and based employee performance reviews and compensation on the quotas, which the NYAG said created "intense pressure" on employees to enroll consumers in store cards.  While we don't know the full facts of the case, the NYAG's point here is an important one.  If you're running an employee incentive program that rewards them based on sales, you should consider how that impacts employee behavior.