Introduction The Sears Holdings company has long been considered a giant in the retail community. It was initially founded in 1886 as a jewelry mail order company based out of Minnesota; before moving their base of operations to Chicago in 1887. It was later renamed the Sears and Roebuck Company and has survived for more than one hundred thirty years as a household name and industry leader for clothing, jewelry, furniture, appliances, and even automotive parts and maintenance. Yet behind its lengthy and near spotless reputation lied a dark secret that would expose the ugly side of what one judge equated to predatory lending practices, the legal and ethical implications of violating federal bankruptcy law, and would end up costing the company some $475 million dollars in fines and damages. In order to understand how Sears managed to land in such hot water, we must first understand the issue at hand. Credit Accounts a Recipe for Disaster in a Troubled Economy …show more content…
When used responsibly, credit cards help individuals acquire items they might otherwise have trouble purchasing – which not only boosts the economy, but also the bottom line of businesses. In the last 30 years the credit card industry has seen consistent growth. From banks to retailers, it seemed like everyone has been finding a way to outdo their competitors by offering consumers lower interest rates, no annual fees and in some cases relaxing qualification requirements in order to attract new business. This is exactly what Sears did in the early 1990’s. Under new leadership, the retailer, who was not performing well made the decision to expand their existing credit card program in order to gain new