Signet Jewelers is under probe for lending practices

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Signet Jewelers is being investigated by federal and state agencies over its lending practices.

In a report filed with the SEC on Friday, the jeweler said the Consumer Financial Protection Bureau’s Office of Enforcement has recommended that the bureau take legal action against it.

According to Signet (SIG), the CFPB is looking at its in-store credit practices, promotions and payment protection products.

Related: The worst day for mall diamonds in 25 years

The filing said the enforcement office thinks Signet may have violated a federal law that bars companies from "unfair, deceptive, or abusive act or practice" when offering consumers a financial product or service.

Signet, which owns Kay Jewelers, Zales and Jared The Galleria Of Jewelry, offers customers financing options through company credit cards.

The New York Attorney General's Office is also investigating the company's financing practices.

Signet said it believes it has acted lawfully.

The company said last month that revenue fell $30 million during the most recent quarter. It also warned that profit heading into next year will be light. Hurricanes and weak sales on engagement and wedding rings led to a "challenging" quarter, CEO Virginia Drosos said.

-- CNNMoney's Nathaniel Meyersohn contributed to this report.

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