May 28--Beaumont-based Conn's Inc. has been slapped with charges of failing to honor product warranties, misleading customers about products, false advertising and encouraging employees to use "high-pressure tactics."

Texas Attorney General Greg Abbott filed a lawsuit Thursday against the consumer electronics and home furnishings chains saying it has violated the Texas Deceptive Trade Practices Act.

The lawsuit is based on information contained in more than 2,000 customer complaints. Conn's operates 75 stores in Texas, Louisiana and Oklahoma including 19 in the Dallas-Fort Worth area.

Conn's brochures obtained by state investigators claimed that replacement warranties protected purchases "for a two full years from the date [they] purchased the product." But the state said customers didn't actually receive two-year warranties and stores failed to provide customers with a copy of the agreement at the time of sale.

Purchases weren't "adequately informed about exclusions, limitations, cancellation penalties and other provisions governing their warranty agreements."

Conn's vice chairman Bill Nylin said the company has been working with the Attorney General's office for the past three months to resolve issues and has fully cooperated with requests.

"We have a 118-year history of delivering outstanding service to our customers," he said in a prepared statement. Last year, the retailer's more than 3,200 employees completed 1.3 million customer transactions. Its Better Business Bureau complaint rate for all 75 stores was less than one-tenth of 1 percent, he said.

According to customer complaints obtained by the Attorney General's office, Conn's delayed repair appointments for weeks or even months, failed to repair the item to working condition, ignored calls, and ultimately, refused to give refunds or replace the defective products.

Instead, customers received refurbished goods, not new products, as promised, the state said.

Warranties cost from $100 to $1,000, depending on the product, and sales associated were compensated for selling them. Commissions from the sale of these warranties represented about 5 percent of Conn's $900 million sales last year.

To increase warranty sales, Conn's associated were told to "create a sense of urgency" and paint a negative picture of what a customer would face without a warranty when something went wrong with the product.

The state is seeking civil penalties and a court order prohibiting Conn's stores from continuing its unlawful conduct. The Attorney General seeks civil penalties of up to $20,000 per violation of the Texas Deceptive Trade Practices Act. In addition, the state is seeking a $250,000 penalty if Conn's conduct financially harmed persons aged 65 or older.

Conn's recently formed a "Customer Help Group," strengthened its service center management and increased the number of trained service technicians and call service operators and provided them with more training, Nylin said.

Conn's is known for offering liberal credit and its sales growth has beat other consumer electronics chains during the recession. In the last three years, it financed about 61 percent of its sales.

Besides selling large and small consumer electronics, ranging from GPS devices to big-screen TVs, the company sells appliances, including refrigerators, freezers, washers and dryers. It also sells lawn and garden products, furniture and mattresses.

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