Settlement recovers millions for military

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ATLANTA — A multistate settlement worth more than $34 million has been recovered for service members and veterans defrauded by a jewelry retailer.


Attorney General Chris Carr has joined a multi-state settlement recovering $34.2 million for more than 46,000 U.S. service members and veterans who were deceived and defrauded by national jewelry retailer Harris Jewelry.

“We will not allow Georgian military families to be exploited, and any company that seeks to do so will face the consequences,” Carr said.

“This settlement provides much-needed relief to service men and women who have been victimized by the deceptive acts of Harris Jewelry. As we mark Military Consumer Protection Month, we hope this serves as a reminder that this type of illegal behavior will not be tolerated in our state.

The multi-state settlement agreement requires Harris Jewelry to stop collecting $21,307,229 of unpaid debt held by 13,426 service members, including $1,935,231.56 of unpaid debt for 1,206 Georgia service members. Additionally, the company is to provide up to $12,872,493 in reimbursements to 46,204 service members who paid for protection plans, including $978,097.81 for 3,711 Georgia service members. Harris Jewelry is also required to vacate judgments against 112 consumers totaling $115,335.64 and remove all negative credit entries reported to consumer reporting agencies.

Harris Jewelry, headquartered in Hauppauge, New York, operated retail stores near and on military bases across the country. Their business model was designed to primarily target and serve the military. A multi-state investigation found local military members were lured into retail stores through a marketing program, dubbed “Operation Teddy Bear,” in which Harris Jewelry advertised teddy bears in uniforms service members with charitable pledges. Investigation revealed that no legal contract had been signed between Harris Jewelry and the charity it claimed to support. Additionally, consumers often received varying and conflicting information about the amount donated to the charity. Sometimes they were told that all of the profits would be donated, and other times they were told only a portion would be donated.

In addition, Harris Jewelry offered predatory loan contracts to military members that were marketed to them as a way to establish or improve their credit ratings. Credit extended to service members through the Harris program was not based on the consumer’s credit score, potential income, or other legitimate factors considered by the banks. Rather, it was based on a serviceman’s branch of service, how much time they had left on their enlistment term, and the category of goods they purchased. Servicemen were led to believe that they were investing in the Harris program and that the jewelry they purchased was a gift from Harris Jewelry.

The jewelry itself was grossly overpriced and of poor quality. The investigation revealed that the company significantly inflated the retail price of its products, usually by multiplying its wholesale price by six or seven times, and in some cases by 10 times the wholesale price. For example, Harris Jewelry bought its popular Mother’s Medal of Honor for $77.70 but sold it for $799. The jewelry was not worth the price, and consumers often reported stones falling off, chains breaking, and the finish fading.

Harris offered the servicemen jewelry protection plans, which they said were optional but were added to nearly every eligible transaction without the serviceman’s knowledge. Protection plan costs ranged from $39.99 to $349.99, depending on the retail price of the item. In some cases, the cost of the protection plan exceeded the wholesale price paid by Harris for the item. Protection plans have been added to a consumer’s retail contract as standard practice without disclosure to the consumer.

With the inflated purchase price, protection plans, taxes, shipping and handling, teddy bears, and other charges, service members were charged more than they were initially told. Using the $799 Mother’s Medal of Honor as an example, the military was billed $79.99 for a protection plan, taxes, and other fees, bringing the main total cost to $974.31. At an interest rate of 14.99% over a 10-month period, the total amount paid by a member ended up being $1,039.26 for the Mother’s Medal of Honor.

According to the consent order, Harris Jewelry violated the FTC Act, the Truth in Lending Act, the Electronic Funds Transfer Act, the Military Loans Act, the Holder Rule, and the laws of the Statement regarding the sale and financing of jewelry to the military.

Specifically, the States and the FTC allege that Harris Jewelry:

  • Made false or unsubstantiated statements that financing jewelry purchases through the company would lead to higher credit scores: the company told the military that it would get a significant improvement in their credit score entering into a retail agreement with Harris Jewelry when in fact that was not true in many cases.
  • Wrongly stated that the protection plan was necessary to fund purchases: As part of the sale of military-themed jewelry and gifts, Harris Jewelry offered a protection plan that covered ring and watch sizing, replacement batteries and repairs. In several cases, the company gave the false impression that the protection plan was not optional or was necessary to finance the purchase when in fact it was optional.
  • Failed to Provide Written Disclosures and Failed to Meet Clearance Requirements for Contracts as Required by Law: Harris Jewelry failed to include written disclosures in its retail contracts as required the Truth in Lending Act and the Military Loans Act and has failed to meet the authorization requirements required by the Electronic Fund Transfers Act. Its Internet and print advertisements also failed to include the required disclosure of truth in the loans. The company also failed to provide written notice as required by the FTC Holder Rule in its contracts and failed to make oral disclosures at the time of sale as required by military loan law.

Service members and veterans who took out a predatory finance loan with Harris Jewelry between January 2014 and July 2022 will be eligible for restitution as long as they paid the collateral. An independent monitor will be set up to oversee relief and contact eligible service members and veterans. Eligible service members and veterans will receive an email and letter in the mail informing them of this agreement and their eligibility. The soldiers will then have to claim their restitution.

The FTC and the attorneys general of California, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Iowa, Kansas, Louisiana, Maryland, Nevada, New York, North Carolina, Pennsylvania, Virginia and Washington join Carr in filing this OK.

Military Consumer Protection Guide

The Attorney General’s Consumer Protection Division offers the Georgia Military Consumer Protection Guide to help serving and former military personnel better understand their rights as consumers and how to protect themselves from common scams. Georgians can download the guide here.

The guide covers a range of topics, including buying a car, housing and tenant rights, insurance, military loan law, budgeting and personal finance, debt collection, identity theft, scams and fraud, and the GI Bill.

Georgia service members who believe they have been the victim of a scam or deceptive marketing practices can contact the Attorney General’s Consumer Protection Division by calling (404) 651-8600 or by filing an online complaint here.