Press Release

Prospect Heights, IL., January 12, 2002 -- Household International (NYSE: HI), announced today that its Household Finance Corporation of California and Beneficial California, Inc. business units, have entered into a settlement agreement with the California Department of Corporations relating to alleged lending violations in California. Without agreeing that these violations were due to a willful act, the Household companies have agreed to pay $8.9 million in settlement to the Department of Corporations, and make additional customer refunds where needed. Household is pleased that this settlement agreement resolves the litigation between the parties.

Following routine regulatory examinations of the two companies, a self-audit requested by the Department of Corporations found that some HFC and Beneficial customers were overcharged on certain administrative fees. The companies issued a refund to those customers believed to have been overcharged. However, that self-audit was flawed and some customers did not receive a proper refund. Accordingly, the company has undertaken measures to fully rectify the situation.

"Household fully cooperated with the California Department of Corporations to address any overcharges made to customers in California," said Gary Gilmer, president of consumer lending, Household. Gilmer reiterated Household's previous statement in this matter, "These overcharges were accidental errors that were in no way willful nor discriminatory." Gilmer added, "We thank the Department's Financial Services Division for its professionalism and prompt attention to this matter. We support the department's mission to ensure that all of California's financial services consumers may enter the marketplace with confidence."

For more than 123 years, HFC and Beneficial have been recognized as the hallmark for responsible lending to middle market America. Earlier this year, the company announced its voluntary "best practice initiatives," which among other things included a reduced prepayment fee period and increased flexibility and disclosures for credit insurance products. Household has also dedicated $3 million over the course of the next three years to community grants promoting consumer financial education. The company is also collaborating with a number of nationally recognized community groups dedicated to bringing financial education courses to local communities.