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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.

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.

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A copy of the agreement may be found at agjefflandry.com/Article/13065.