Louisiana Attorney General Joins Agreement to Help Recover $34.2 Million for Service Members Defrauded by Jewelry Retailer

Baton Rouge, Louisiana – On August 25, 2022, the Louisiana Office of the Attorney General announced that Attorney General Jeff Landry joined an agreement to recover $34.2 million for over 46,000 service members and veterans who had been duped and scammed by national jewelry store Harris Jewelry.

The jewelry company used misleading marketing strategies to entice active-duty service members to participate in their financing scheme, falsely claiming that doing so would improve service members’ credit scores. Instead, service members were duped into taking out high-interest loans on costly, low-quality jewelry, racking up thousands of dollars in debt and damaging their credit.

The agreement reached by 18 states and the FTC requires Harris Jewelry to refund tens of thousands of service members for warranties they were duped into purchasing, to stop collecting millions of dollars in debt, rectify negative credit scores, and to close all of Harris Jewelry’s operations. Harris Jewelry also has to pay $1 million to each of the 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, based in New York, has retail locations near and on military bases across the country. Their customers were mostly military personnel. The multi-state inquiry discovered that service members were lured into retail establishments via a marketing technique known as “Operation Teddy Bear,” in which Harris Jewelry sold teddy bears dressed in military uniforms with the promise of charity donations. Further inquiry revealed that no formal agreement existed between Harris Jewelry and the organization it purported to support. Furthermore, buyers were frequently given different and contradictory information about the amount donated to charity.

Furthermore, Harris Jewelry provided military members with predatory financing contracts that were sold to them as a way to enhance or improve their credit scores. The Harris Program credit extended to service personnel was not based on a consumer’s credit score, projected income, or other legitimate variables that banks examine. Rather, it was determined by a military member’s branch of service, the amount of time left on their term of enlistment, and the type of item purchased. Members of the military were encouraged to believe that they were investing in the Harris Program and that the jewelry they purchased was a gift from Harris Jewelry.

Harris Jewelry, in essence, exploited charity appeals as a marketing strategy to lure military personnel into high-priced, deceptive in-house finance contracts for grossly expensive jewelry. The jewelry was of low quality, the prices were exorbitant, loan contracts included hidden costs, and payments were directly linked to military pay.

In connection with jewelry sales and financing to members of the military, 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, according to the cooperation order. The agreement compels Harris Jewelry to stop collecting $21,307,229 in outstanding debt owed by 13,426 military members and to reimburse $12,872,493 to 46,204 service members who purchased protection policies. Harris Jewelry must also invalidate 112 consumer judgments totaling $115,335.64 and remove any negative credit records reported to consumer reporting agencies.

Service personnel and veterans who took out a predatory financing loan with Harris Jewelry between January 2014 and July 2022 will be eligible for restitution up to the value of warranties paid for. To oversee the aid and contact qualified service members and veterans, an independent monitor will be deployed. Eligible service members and veterans will get an email and a letter in the mail informing them of the agreement and their eligibility; service members must then claim their reparation.

Attorneys general from New York, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maryland, Nevada, North Carolina, Pennsylvania, Virginia, and Washington have signed on to the agreement with Attorney General Landry and the FTC.