Conn’s Appliance lawsuits span roughly fifteen years and four distinct fronts: a 2009 Texas consumer-protection case over extended warranties, a 2019 Securities and Exchange Commission accounting case paired with investor class actions, a 2020 Department of Justice settlement over interest overcharges to military servicemembers, and thousands of debt-collection suits the company itself filed against defaulted borrowers. All of it ended in a July 2024 Chapter 11 filing, the liquidation of every Conn’s HomePlus and Badcock store, and the sale of the consumer loan portfolio to Jefferson Capital Systems, which now services and collects on those accounts.
The 2009 Texas Attorney General Warranty Case
In May 2009, then-Attorney General Greg Abbott sued Conn’s in Harris County under the Texas Deceptive Trade Practices Act after thousands of customer complaints.1Houston Public Media. Attorney General Says Conn’s Conned Customers The state alleged that Conn’s pressured customers into extended warranties costing $100 to $1,000, promised new replacement products when items could not be repaired, then used contracts that actually allowed refurbished substitutes. Internal sales manuals told employees to create a “sense of urgency” and script responses to objections.2ABC13. Texas Retailer Conn’s Settle Warranty Dispute
The attorney general also alleged Conn’s dragged out repairs for weeks or months rather than replacing defective products, because the warranty companies reimbursed repair attempts while replacements came out of Conn’s own pocket.1Houston Public Media. Attorney General Says Conn’s Conned Customers
The case settled on November 24, 2009. Conn’s paid $4.5 million in consumer restitution, $250,000 in attorney’s fees, and $100,000 to the University of Houston Consumer Law Clinic.3San Antonio Express-News. Texas Retailer Conn’s Settle Warranty Dispute The company agreed to reform its sales practices and honor the warranties it sold. Chairman William Nylin said at the time that Conn’s continued to deny the allegations.4Beaumont Enterprise. Conn’s to Pay $4.5 Million to Settle State Case
SEC Accounting Case and Investor Lawsuits
On July 15, 2019, the SEC filed a civil complaint against Conn’s and former Chief Operating Officer Michael J. Poppe, alleging the company understated its allowance for bad debts and overstated income for roughly two years beginning in mid-2012.5SEC. Litigation Release No. 24532
The dispute centered on a forecasting tool called the “roll rate” model, which estimated how many customer loans would go bad. According to the SEC, executives bypassed historical data required by the company’s own policies and inserted manual adjustments based on “unduly optimistic expectations.” Actual loan losses exceeded the model’s estimates for 14 straight quarters, and the SEC said a proper reserve would have been 20% to 30% larger.6SEC. SEC Complaint, Case No. 4:19-cv-2534
When Conn’s corrected its financials in fiscal 2015, the stock fell 30% in one quarter and 41% the next.5SEC. Litigation Release No. 24532 Both defendants settled without admitting or denying the allegations. Conn’s paid $1.1 million; Poppe paid $50,000. The company replaced its senior management team and created a Credit Risk and Compliance Committee on its board.6SEC. SEC Complaint, Case No. 4:19-cv-2534
Institutional investors filed a parallel securities class action in 2014 in the Southern District of Texas, In re Conn’s, Inc. Securities Litigation (No. 14-cv-0548), naming the company along with CEO Theodore Wright, CFO Brian Taylor, and Poppe. The complaint alleged Conn’s deliberately loosened underwriting starting in late 2012, extended credit to customers who were not creditworthy, and hid the resulting exposure from investors.7Labaton Keller Sucharow. In Re Conn’s, Inc. Securities Litigation After the court partially denied the defendants’ motion to dismiss in 2016, the parties settled for $22.5 million, with final approval on October 12, 2018.8Levi & Korsinsky. Conn’s, Inc. Settlement
A second securities class action followed, covering a class period from September 3, 2019, through December 9, 2019, with similar allegations that Conn’s failed to disclose rising delinquencies and credit-tightening that would hurt same-store sales.9Levi & Korsinsky. Conn’s, Inc. Class Action Lawsuit
DOJ Settlement for Overcharging Military Servicemembers
On September 15, 2020, the Department of Justice settled with Conn Credit I, LP, Conn Appliances, Inc., and Conn’s, Inc. over violations of the Servicemembers Civil Relief Act. The SCRA requires creditors to cap interest at 6% on pre-service loans once a borrower enters active duty and provides proper notice.10DOJ. Justice Department Settles With Texas-Based Furniture and Appliances Chain
Between March 2014 and May 2019, the DOJ alleged, Conn’s failed or refused to lower rates on 184 of 322 servicemember accounts where the benefit had been requested. The government said the company also charged improper extension fees that functioned as interest, failed to apply the 6% cap retroactively to the eligibility date, and in some cases told borrowers rates would not drop until loans were paid off.11Marine Corps Times. Furniture Retail Chain Agrees to Pay Service Members for Alleged Interest Overcharges
The consent order required Conn’s to refund all overcharged interest and pay an additional $500 to each affected servicemember, plus $50,000 to the U.S. Treasury. An independent consultant had to review the full portfolio for additional overcharges, and the company was required to adopt SCRA training and compliance procedures. Conn’s neither admitted nor denied the allegations.12DOJ. United States v. Conn Credit I, LP — Consent Order
Debt Collection Lawsuits Filed by Conn’s
Conn’s was also a prolific plaintiff. Its in-house credit arm financed purchases directly, often for subprime borrowers, and when customers defaulted the company hired local collection attorneys to file suits in state courts across Texas and elsewhere. By some accounts, Conn’s filed thousands of these cases a year.13Weston Legal. Sued by Conn’s
If you were served, you generally had 14 to 30 days to file an answer. Ignoring the suit risks a default judgment, which can lead to wage garnishment or bank-account seizure depending on your state’s law. Federal rules require banks to protect two months’ worth of directly deposited federal benefits from garnishment.14CFPB. Can a Debt Collector Take or Garnish My Wages or Benefits?
Bankruptcy and What Happened to Customer Accounts
On July 23, 2024, Conn’s and ten affiliated entities filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas before Judge Alfredo R. Perez (Case No. 24-33357).15Epiq. Conn’s, Inc. Bankruptcy Case Information The company cited weakening post-pandemic demand, high interest rates, inflation, and difficulties integrating W.S. Badcock, a subprime retailer-lender it had acquired in December 2023.16Elevenflo. Conn’s, Inc. Chapter 11 Case
The initial filing earmarked about 108 stores for closure, but the court ultimately approved liquidation of all 550-plus Conn’s HomePlus and Badcock Home Furniture locations. B. Riley Retail Solutions ran the going-out-of-business sales.17CoStar. Conn’s HomePlus Begins Wind-Down of All Its Namesake and Badcock Stores
In December 2024, the bankruptcy court approved the sale of Conn’s consumer loan portfolios to Jefferson Capital Systems for roughly $353 million.18Sidley Austin. Sidley Secures Confirmation of Conn’s Chapter 11 Plan Jefferson planned to bring on roughly 200 former Conn’s employees and take over part of the servicing platform to collect on the acquired accounts.19Fitch Ratings. Jefferson Capital’s Ratings Outlook Unaffected by Conn’s Portfolio Acquisition If you have an open Conn’s balance, that is where the account sits now.
The court confirmed the Second Amended Joint Plan of Distribution on July 21, 2025, and it took effect on July 31, 2025. A distribution trust holds assets for general unsecured creditors, whose projected recovery is roughly 1% on about $375 million in claims. Secured lenders are projected to recover between 30% and 73%. Equity holders received nothing.20Chapter 11 Cases. Conn’s, Inc. Files Second Amended Liquidation Plan Conn’s now exists only as a wind-down entity collecting on residual assets.18Sidley Austin. Sidley Secures Confirmation of Conn’s Chapter 11 Plan
If You Still Have a Conn’s Account or an Unresolved Claim
A loan balance you owed to Conn’s did not disappear with the stores. Jefferson Capital bought those receivables and is the party now entitled to collect, so any payment arrangement, dispute, or settlement discussion runs through that company rather than Conn’s.
If you are sued over an old Conn’s debt, the suit will typically come from the current account owner or its law firm, not from a store that no longer exists. The deadline to answer still runs from the date you are served, and a default judgment can still lead to garnishment under your state’s rules.
If you are a general unsecured creditor of Conn’s itself, with a claim arising before the bankruptcy, your recovery runs through the distribution trust set up under the confirmed plan and is projected at roughly one cent on the dollar. Shareholders in the old company received nothing under the plan.