AG Miyares joins multistate settlement to recover millions to 46K service members defrauded by Harris Jewelry

Miyares secures over $1M in potential restitution for over 3,800 Virginians and $1.7M in debt forgiveness for over 1,000 Virginians
Posted at 4:38 PM, Jul 20, 2022
and last updated 2022-07-20 16:38:46-04

RICHMOND, Va. - Attorney General Jason Miyares has joined other state attorney generals in a settlement that recovers $34.2 million for service members who were defrauded by a national jewelry retailer.

Miyares has joined a multistate settlement that involves the Federal Trade Commission (FTC) and seventeen other state attorneys general.

The settlement recovers $34.2 million for more than 46,000 service members and veterans who were deceived and defrauded by national jewelry retailer, Harris Jewelry.

They say 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 their credit scores.

According to Miyares, service members were instead tricked into obtaining high-interest loans on the jewelry leaving them with thousands of dollars of debt and worsening their credit.

The agreement 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, to correct bad credit scores, and dissolves all of Harris Jewelry’s businesses.

It also requires Harris Jewelry to pay $1 million to all 18 states involved in the settlement. The FTC and the attorneys general of California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Louisiana, Maryland, New York, Nevada, North Carolina, Pennsylvania, and Washington, join the settlement.

“Harris Jewelry targeted our military community, misleading, deceiving, and defrauding thousands of active duty service members through their financing program. Our service members are critical to the American experiment, dedicating their lives to the protection of our freedoms and way of life. I’m grateful we were able to reach an agreement and provide relief to thousands of Virginians,” said Attorney General Miyares.

There is $1,084,912.58 in potential restitution for protection plans for 3,828 Virginians, and $1,703,408.89 in debt forgiveness for 1,011 Virginians.

Harris Jewelry operated retail stores near and on military bases around the country.

Officials say the company's business model was designed to primarily target and service people in the military. An investigation found that local service members were enticed into their retail stores through “Operation Teddy Bear.”

The marketing scheme advertised teddy bears in military uniforms with promises of charitable donations. According to the investigation, there was no contract between Harris Jewelry and the charity they claimed donations were going to.

The investigation also revealed that Harris Jewelry offered them predatory lending contracts claiming to build or improve their credit scores, however, the contracts were actually based on the member's branch of service, amount of remaining time on enlistment, and the category of jewelry bought, instead of their credit scores.

According to the settlement investigation, 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. They also consistently added protection plans to the transactions without disclosure to the service members.

According to 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.

States and FTC allege that Harris Jewelry:

  • Made false or unsubstantiated claims that financing jewelry purchases through the company would result in higher credit scores; 
  • Misrepresented that the protection plan was required to finance purchases; and
  • Failed to provide written disclosures and meet authorization requirements for contracts as required by law. 

Those 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.

Those eligible will receive an email and letter in the mail notifying them of this agreement and their eligibility. Eligible service members will then have to claim their restitution.