Conn’s: You Deserve Better
Conn’s originated in 1890, under the name of Eastham Plumbing and Heating Company, founded by Edward Eastham in Beaumont, Texas. In 1937, after multiple name and owner changes, Conn’s began to shift focus to appliance sales, specializing in refrigerators.
In 1959, Conn’s officially became a chain, opening a second store location in Beaumont. The company continued to expand and open new locations in the South throughout the latter half of the 20th century. In 1993, Conn’s hit a landmark of its first $100 million sales volume year. Today, Conn’s is a publicly traded company that has expanded its reach of merchandise beyond appliances to electronics, mattresses, and furniture. However, with this expansion and appearance in the public eye came scrutiny.
In recent years, Conn’s has become somewhat notorious for the practice of offering flexible finance and credit options for “high-risk” customers, which has led to multiple legal issues. A class action lawsuit has been filed against Conn’s in the United States District Court for the Southern District of Texas, on behalf of a class of people who purchased securities from Conn’s between September 2, 2014 and December 4, 2014. Allegedly, the defendants made misleading statements to investors about their collection practices, covered up the amount of bad debt that they were vulnerable to, represented a different amount of debt delinquencies than the company actually experienced, and used credit practices that threatened the company’s financial integrity. However, this is not the first lawsuit Conn’s has been involved in.
A lawsuit was filed against Conn’s in 2009 for allegedly failing to properly honor warranties, passed off pre-owned appliances as new products, and used overly aggressive sales tactics in order to sell warranties to customers. In November of 2009, Conn’s settled and agreed to pay $4.5 million to the customer restitution fund for those involved in the lawsuit. Despite settling, the company remained insistent that the accusations against them were false.
The 2009 lawsuit that Conn’s chose to settle, and the 2014 lawsuit that has not yet been settled have greatly altered the public’s opinion of the company that once prided itself in excellent customer service, and affordable credit options for customers who could not afford to pay flat amounts for appliances. After years of legal trouble, poor public image, and severe scrutiny, the fate of Conn’s latest class action suit will provide clarity for the future of the company.