July 20, 2022
City, NV – Today,
Attorney General Aaron D. Ford announced he has joined a multistate agreement
that recovers $34.2 million for more than 46,000 servicemembers and veterans
who were deceived and defrauded by the national jewelry retailer Harris
Jewelry. The agreement is co-led by New York Attorney General’s office and the
Federal Trade Commission (FTC).
Jewelry, headquartered in Hauppauge, New York, used deceptive marketing tactics
to lure active-duty servicemembers to their financing program, falsely claiming
that investing in this program would improve servicemembers’ credit scores.
Instead, servicemembers 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 18-state agreement requires Harris Jewelry
to refund tens of thousands of servicemembers for warranties they were tricked
into purchasing; to stop collecting millions of dollars of debt; and to correct
bad credit scores. The agreement also dissolves all of Harris Jewelry’s
agreement should stand as an example of what will happen to businesses who
defraud our citizens and our servicemembers,” said AG Ford. “Harris
Jewelry specifically targeted our servicemembers – men and women who defend our
country – and defrauded them out of millions. I am proud to say that they have
been brought to justice.”
agreement requires Harris Jewelry to stop collecting $21,307,229 in outstanding
debt that is held by 13,426 servicemembers and to provide $12,872,493 in
refunds to 46,204 servicemembers 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.
terms of the agreement, 48 Nevada consumers will receive automatic debt
forgiveness in the amount of $66,348.91, and 173 Nevada consumers who
participated in Harris Jewelry’s Lifetime Jewelry Watch and Protection Plan
between Jan.1, 2014 and the date of entry of order can apply for restitution from
a total of $46,670.64. The state will also receive $50,000.
Jewelry operated retail stores near and on military bases around the country.
Their business model was designed to primarily target and service people in the
military. A multi-state investigation found that local servicemembers 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. The investigation found that no legal
contract was signed between Harris Jewelry and the charity it claimed to
support, and consumers were often given varying and conflicting information
about the amount donated to the charity.
today’s consent order, 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 investigators allege that Harris Jewelry:
Made false or
unsubstantiated claims that financing jewelry purchases through the company
would result in higher credit scores: The
company told servicemembers that they would achieve a significant improvement
in their credit score by entering a retail installment contract with Harris
Jewelry when that was not true in many instances. The credit advanced to
servicemembers 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 servicemember’s branch of service, the amount of time
they have remaining on the term of enlistment and the category of merchandise
that the protection plan was required to finance purchases: In connection with the sale of jewelry and military-themed gifts,
Harris Jewelry offered a protection plan that covered ring and watch sizing,
battery replacements and repairs. In several instances, the company gave the
false impression that the protection plan was not optional or was required to
finance the purchase when it was in fact optional. The costs of the
protection plans ranged from $39.99 to $349.99, depending on the retail price
of the item. In some instances, the cost of the protection plan exceeded the
wholesale cost Harris paid for the item. Protection plans were added to a
consumer’s retail installment contract as a routine practice without disclosure
to the consumer.
Failed to provide
written disclosures and meet authorization requirements for contracts as
required by law: Harris Jewelry failed to include
written disclosures in its retail installment contracts as required by the
Truth in Lending Act and Military Lending Act and meet authorization
requirements as required by the Electronic Fund Transfer Act. Its internet and
print ads also failed to include the required Truth in Lending disclosure. The
company also failed to provide written notice as required by the FTC’s Holder
Rule in its contracts and failed to make oral disclosures at the time of sale
as required by the Military Lending Act.
itself was significantly overpriced and poor quality. The investigation found
that the company dramatically inflated the retail price of its products,
generally by multiplying its wholesale cost by six or seven times, and in some
cases 10 times the wholesale cost. For example, Harris Jewelry purchased its
popular Mother’s Medal of Honor at $77.70 but sold it at $799.
were often charged much more than they were initially told. Using the $799
Mother’s Medal of Honor as an example, servicemembers were charged $79.99 for a
protection plan, taxes and other fees, bringing the total principal cost to
$974.31. At a 14.99% interest rate over a 10-month period, the total amount
paid by a servicemember ended up being $1,039.26 for the Mother’s Medal of
independent monitor will be installed to oversee the relief and contact
eligible servicemembers and veterans. Eligible servicemembers and veterans will
receive an email and letter in the mail notifying them of this agreement and
their eligibility, servicemembers will then have to claim their restitution.
AG Ford joins
the New York Attorney General’s office and the FTC in today’s agreement, along
with the attorneys general of California, Connecticut, Delaware, Florida,
Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Louisiana, Maryland, North
Carolina, Pennsylvania, Virginia and Washington.