Sen. Schumer warns consumers about buying on layaway

With the holidays approaching, some shoppers are turning to layaway programs offered by stores in order to pay for the nicest gifts this season. However, Sen. Chuck Schumer (D-N.Y.) is warning consumers to be careful about some stores that charge hidden fees.

Shoppers at the Toys R Us in Yonkers say they like the store's layaway program, as it gives them the opportunity to budget their purchases, making holiday shopping easier on them. But Schumer says layaway deals offered at stores like Sears and Walmart charge shoppers hidden fees, including additional fees if someone wants to cancel a layaway purchase. He adds that stores often don't refund service fees.

"This ends up costing parents more than credit card ratings," says Schumer.

Schumer says if stores refuse to show customers a comparison between fees from the layaway program to credit interest rates, he'll get the Federal Trade Commission to investigate. The Retail Industry Leaders' Association defended layaway programs, saying they are "neither credit or a loan."

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