Jewelry retailer required to
provide refunds, stop collecting debt, and correct bad credit scores for
American heroes
BATON ROUGE, LA – Louisiana
Attorney General Jeff Landry joined an agreement that recovers $34.2 million
for more than 46,000 service members and veterans who were deceived and
defrauded by national jewelry retailer Harris Jewelry.
The jewelry company used deceptive marketing tactics to lure active-duty
service members to their financing program, falsely claiming that investing in
this program would improve service members’ credit scores. Instead, service
members were tricked into obtaining high-interest loans on overpriced,
poor-quality jewelry that saddled them with thousands of dollars of debt and
worsened their credit.
The agreement made by 18 states
and the Federal Trade Commission (FTC) requires Harris Jewelry to refund tens
of thousands of service members for warranties they were tricked into
purchasing, to stop collecting millions of dollars of debt, correct bad credit
scores, and dissolves all of Harris Jewelry's businesses. Harris Jewelry must
also pay $1 million to all 18 states.
“The idea that a company would deceive
and defraud those sworn to defend our freedom is unconscionable,” said Attorney
General Landry. “My office will continue to do all we can to protect Louisiana
consumers, especially those who chose to wear the cloth of our Nation.”
Harris Jewelry, headquartered in
New York, operated retail stores near and on military bases around the country.
Their business primarily targeted members of the military. The multi-state
investigation found that service members were enticed into retail stores
through a marketing scheme dubbed “Operation Teddy Bear,” in which Harris
Jewelry advertised teddy bears in military uniforms with promises of charitable
donations. Further investigation found that no legal contract was actually
signed between Harris Jewelry and the charity it claimed to support. Moreover,
consumers were often given varying and conflicting information about the amount
donated to the charity.
Additionally, Harris Jewelry
offered service members predatory lending contracts that were marketed to
service members as a way to build or improve their credit scores. The credit
advanced to service members through the Harris Program was not based on a
consumers’ credit score, potential income, or other legitimate factors that
banks consider. Rather, it was based on a service member's branch of service,
the amount of time they have remaining on the term of enlistment, and the
category of merchandise they purchased. Service members were led to believe
that they were investing in the Harris Program and the jewelry they purchased
was a gift from Harris Jewelry.
In essence, Harris Jewelry used
charity pleas as a marketing tactic to dupe service members into high-priced,
deceptive in-house financing contracts for vastly overpriced jewelry. The
jewelry was poor quality, the prices were highly inflated, finance contracts
had hidden fees, and the payments were directly tied to the military paydays.
The consent order states that
Harris Jewelry violated the FTC Act, the Truth in Lending Act, the Electronic
Fund Transfer Act, the Military Lending Act, the Holder Rule; and state laws in
connection with jewelry sales and financing to members of the military. The
agreement requires Harris Jewelry to stop collecting $21,307,229 in outstanding
debt that is held by 13,426 service members and to provide $12,872,493 in
refunds to 46,204 service members who paid for protection plans. Harris Jewelry
is also required to vacate judgments against 112 consumers totaling $115,335.64
and delete any negative credit entries reported to consumer reporting agencies.
Service members and veterans who
entered into a predatory financing loan with Harris Jewelry between January
2014 and July 2022 will be eligible for restitution to the extent they paid for
warranties. An independent monitor will be installed to oversee the relief and
contact eligible service members and veterans. Eligible service members and
veterans will receive an email and letter in the mail notifying them of this
agreement and their eligibility; service members will then have to claim their
restitution. Every service member or veteran who has purchased an item from Harris since 2015 should make a claim at www.harrisjewelry.com as soon as practical. The claims process may be concluded as early as approximately 6 months from September 1, 2022.
Joining the agreement with
Attorney General Landry and the FTC are the attorneys general of New York,
California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois,
Iowa, Kansas, Maryland, Nevada, North Carolina, Pennsylvania, Virginia, and
Washington.