Delaware joined 17 other states on Wednesday in reaching a $34.2 million settlement with a national jewelry chain that “deceived and defrauded” more than 46,000 service members and veterans across the country, according to the state Department of Justice.
Harris Jewelry, which is headquartered in New York, agreed to pay each state $1 million as part of the settlement. It will also stop collecting more than $21 million in outstanding debt held by nearly 13,500 service members and provide $12.8 million in refunds to about 46,000 service members who paid for protection plans, many unknowingly, according to the settlement.
The company must also vacate judgments against 112 customers – which totals more than $115,000 – and delete any negative credit entries reported to credit agencies.
“Harris Jewelry’s conduct was unconscionable,” said Attorney General Kathy Jennings in a written statement. “Instead of the honor, respect, and support owed to all who are serving and have served our country, Harris Jewelry preyed on those populations for a cheap buck.”
According to the state Justice Department, the company used “deceptive” marketing tactics to attract active-duty service men and women to their financing program. The company claimed the program would improve 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 Justice Department said.
The multistate investigation, which was led by New York officials, found that Harris Jewelry significantly inflated the price of its products, often marking up the cost six or seven times the piece’s wholesale cost.
In some cases, such as with the popular Mother’s Medal of Honor, the sale price was 10 times higher than the company’s wholesale cost. That particular piece of jewelry cost the company $77.70, but was sold for $799.
“The jewelry was not worth the price and consumers often reported stones falling out, chains breaking and the finish fading,” the Justice Department said.
In addition to the low-quality items, Harris Jewelry also ran a shady protection plan, officials said. While the company claimed the plan was optional, it “was added to nearly all eligible transactions without (consumers’) awareness.”
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The plans ranged from $39.99 to $349.99, depending on the retail price of the item bought. In some cases, the Justice Department said, the cost of the protection plan was more expensive than the wholesale cost of the item.
Service members and veterans who entered into financing loans with the company between January 2014 and July 2022 will be eligible for restitution to the extent they paid for warranties, and an independent monitor will be installed to oversee this.
It will also contact eligible service members and veterans by email and letters in the mail. Service members will then have to claim their restitution.
In addition to Delaware and the Federal Trade Commission, the other 17 states involved were California, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Louisiana, Maryland, Nevada, New York, North Carolina, Pennsylvania, Virginia and Washington.
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