A now-defunct national jewelry company has agreed to pay millions in refunds to settle allegations that it cheated military families across the country with illegal fundraising and sales practices for expensive jewelryin a settlement announced by the Federal Trade Commission and 18 state attorneys general.
Two of its stores were located on military bases: Fort Bliss, Texas, and Fort Benning, Georgia.
Hauppage, New York-based Harris Originals agreed to pay back $13 million to 46,204 service members who paid for lifetime protection plans and stop collecting $21 million in debts owed by 13,426 service members.
The settlement agreement was filed Wednesday in the U.S. District Court for the Eastern District of New York and is pending court approval.
Additionally, Harris Originals, also known as Harris Jewelry, must provide refunds for overpayments and contact credit reporting agencies to request removal of negative credit entries. The company must complete the shutdown once the requirements of the agreement are met.
Service members and veterans who took out a finance loan beginning in January 2014 will be eligible for restitution to the extent that they paid for these Lifetime Protection Plans. They will receive an e-mail and a letter by post informing them of their eligibility; these customers must then request their refund.
The 18-state settlement agreement was co-led by the Federal Trade Commission and the New York Attorney General’s Office. Each of the company’s 19 retail stores across the country is separately incorporated as a wholly owned subsidiary of Harris Originals of New York.
Harris Jewelry has opened 19 retail stores across the country, including those in malls in Fort Bliss, Texas, and Fort Benning, Georgia, according to court documents.
The other stores were located near military bases in shopping malls with many military customers or in kiosks at airports serving military bases, according to court documents.
The company sold military-themed gifts, jewelry, and watches, and nearly all of its sales were made on credit, financed by the company. The stores were located near the bases of all service branches, from Hawaii to San Diego, to San Antonio, to Jacksonville, North Carolina.
The company closed its stores in April 2021, due to the COVID-19 pandemic. The company will not reopen stores, Harris Jewelry officials said in a statement provided to the Military Times.
Harris Jewelry does not admit or deny any of the allegations, according to the proposed settlement agreement. The settlement “resolves these issues in the best interests of all of its stakeholders,” company officials said.
The statement noted his “proud history of over 60 years of service to active duty military personnel, retirees, reservists, the National Guard and their families.”
Service members purchased jewelry that ranged in price from $1,000 to $3,300, according to court documents.
“The company used deceptive marketing tactics to lure active duty military members into its financing program, falsely claiming that investing in the program would improve military credit scores,” according to the New York Attorney General’s office. . “Instead, servicemen were tricked into taking out high-interest loans on overpriced, shoddy jewelry that saddled them with thousands of dollars in debt and worsened their credit.”
Authorities also allege that the company falsely stated that the protection plan was necessary to finance the purchases, failed to provide written disclosures, failed to provide oral disclosures at the time of the sale, as required by the Military Loans Act.
The store in Fort Bliss, Texas, operated from June 2015 to April 2021. The store in Fort Benning, Georgia, operated from May 2017 to April 2021, said Julie Mitchell, spokeswoman for the Army & Air Force Exchange. Service. Jewelry stores operated as dealers.
When considering whether a company can establish concession operations with AAFES, officials consider company creditworthiness, customer demand, service levels and alignment with contracts and policies. Department of Defense regulations and U.S. law, Mitchell said.
Harris Jewelry’s website says it will let customers know they may be eligible for reimbursement on lifetime protection plans — and the company no longer has to honor those plans.
The site also says the company is no longer accepting payments on the loans and all remaining balances have been written off. They also requested that the three credit bureaus remove all previously reported negative credit entries.
All of this is required of the company as part of the settlement agreement.
According to court documents, Harris Jewelry violated federal laws, including the Military Loans Act, “by targeting active duty members at retail stores across the country and making misleading, false and unsubstantiated statements that the defendants’ retail contracts financed the purchase of military equipment – themed gifts, jewelry and watches would improve the credit history of service members.
“Defendants target their advertising, sales pitch, merchandise, pricing and financing at active duty members,” the complaint alleged.
The central theme of Harris Jewelry’s sales pitch “is that buying on credit from them, regardless of service members’ credit history or subsequent borrowing or payment activity, will improve credit scores service members, saving service members thousands of dollars on car loans and obtaining military promotions,” the complaint alleges. “The defendants’ representations, however, are misleading, false, or unsubstantiated.”
Authorities also alleged the company used charity appeals as a marketing tactic “to dupe service members into deceptive and costly internal contracts for very expensive jewelry,” according to the New York Attorney General’s announcement. .
Troops received varying and conflicting information about the amount of money that would be donated to charity.
The states involved in the lawsuit were California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansa, Louisiana, Maryland, Nevada , New York, North Carolina, Pennsylvania, Virginia and Washington.
AAFES was not involved in any of the investigations, Mitchell said. However, the Federal Trade Commission’s announcement said the FTC and the states “are grateful for the coordination and support of the Department of Defense on this matter.”
The Department of Defense “appreciates the work of the FTC and other partners to protect service members and their families from these harmful practices and to seek appropriate remedies,” said Gilbert R. Cisneros, Under Secretary of Defense for the DoD for Personnel and Readiness. statement provided to the FTC. “We believe these efforts contribute to the overall financial well-being and readiness of service members.”
Customers with questions, or those who believe they are eligible for a refund but have not been notified, may contact the New York State Attorney General’s Office at (315) 523-6080.
Karen has covered military families, quality of life and consumer issues for Military Times for over 30 years, and co-authored a chapter on media coverage of military families in the book “A Battle Plan for Supporting Military Families”. She previously worked for newspapers in Guam, Norfolk, Jacksonville, Florida and Athens, Georgia.